Oklahoma City Bankruptcy Law Firm - Credit Counseling

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Credit Counseling Requirement in Oklahoma Bankruptcy

In 2005, the American economy appeared to be strong and growing. As such and in a political sense, it seemed like a good time to rework the bankruptcy laws that had been in place for many years. As such, Congress passed a law known as the Bankruptcy Abuse Prevention and Consumer Protection Act. This law made it more difficult for people to simply file for bankruptcy and added more steps to the process that the debtor was required to complete before his or her debts could be discharged.

One of the central requirements that was part of the new law concerned the debtor’s requirement to complete two different types of credit counseling, with one requirement in place prior to filing and one prior to the ultimate discharge. Below is an overview of these requirements, including the specifics involved, the effects on the debtors who need protection, the reality of the benefits these requirements purported to provide and ultimately how you should proceed if you find yourself with seemingly no way out from under your financial struggles.

Hiring an Oklahoma Bankruptcy Lawyer

Generally, the credit counseling requirement in bankruptcy has been seen by critics to provide little benefit to the debtor and tangible benefits to both the unsecured credit market and the credit counseling market. Even though these requirements may not be logical in many cases, the law still requires them.

Therefore, there are now more steps involved with the filing for bankruptcy protection, but that does not mean that these steps should serve as a reason not to file for protection by those who need it. Working with an Oklahoma City bankruptcy attorney will still allow you to move through this process with the guidance of an experienced professional as it’s always been, and the end result would likely be the same – your debts are discharged and your financial slate is wiped clean. If you would like to find out more about how this process works and whether filing for bankruptcy is the proper option for putting an end to your financial struggles, contact the Oklahoma City bankruptcy attorneys at Atkins & Markoff today to schedule an initial consultation

Our attorneys will evaluate your situation for FREE with no obligation. Pick up the phone and call us at (877) 491-8818 today.

Steps to Find a Credit Counseling Service

As of 2005, Debtors are Required to Enroll in Two Credit Counseling Courses: Pre-Filing and Pre-Discharge. These Courses Can Help You:

Learn Money Management Skills
Reduce Your Debt
Find a Way to Avoid Bankruptcy
Deal With Harassing Creditors
Understand Financial Issues of Your Debt
Better Manage Expenses
Effectively Control Your Finances to Avoid Future Bankruptcy

Oklahoma City Bankruptcy Attorneys

How Do I Find a Credit Counselor?

Many Credit Counseling Services Popped Up All Over the US After Counseling Became Mandatory in 2005. When Searching for a Counselor, Asking These Questions May Help You Find the Best Counseling Service:

What Services do They Offer?
What Are Their Fees?
What if I Can Not Afford the Fees?
What Qualifications Do Their Counselors Have?
Is My Information Secure?
Are Their Employees Paid on a Commission Basis?
How Will They Help Me Develop a Plan For the Future?

Effects of Credit Counseling
Credit Counseling Specifics

Effects of Oklahoma Credit Counseling Requirements

This new credit counseling requirement was widely panned by critics of the new law for many reasons, not the least of which was the presence of doubt regarding its overall utility. Practically speaking, there are many debtors who file for bankruptcy protection because they simply have no means of ever digging out from under their debts either because their liabilities are too high in amounts or because they did not generate enough income to ever realistically pay their existing debts. However, this requirement remained in place regardless of the actual situation in which debtors found themselves, meaning that many went through this process with no hope of avoiding the need for help from the Bankruptcy Court.

In effect, this requirement only slowed the process of allowing the debtor to file his or her petitions, which in the process provided more time for creditors to pursue collection efforts that were generally a motivating factor for debtors to file in the first place. These collection efforts included letters, constant phone calls and even the pursuit of legal remedies that all took place before the Bankruptcy Court ever got involved.

In addition to the pre-filing credit counseling requirement, debtors were also now required to complete a post-filing course on personal financial management before the court could grant the debtor the discharge of the debts that led to the filing. While many saw more potential benefits for the debtor in learning some basic financial management skills, this process also extended the period that the bankruptcy case remained open and pending.

Credit Counseling Requirement Specifics

Based on the 2005 bankruptcy laws, all debtors were from that point forward required to undergo and complete credit counseling before filing a bankruptcy petition that provided the debtor with instant relief from collection efforts by their creditors. The debtors were now required to complete this process by working with credit counseling agencies that were approved by the United States Bankruptcy Trustee’s office.

When a debtor went through this process, the credit counseling agency analyzed the debtor’s overall financial picture and proposed a repayment plan for the debtor that would move towards avoiding the filing of a bankruptcy petition. The credit counseling industry had been in place for several years prior to the passage of this law, but participating in their programs was almost entirely voluntary until 2005.

The debtor was not required to accept the proposed repayment plan before filing for bankruptcy protection, but that repayment plan proposal became a requirement that needed to be included with the original bankruptcy petition so that the court could see that this requirement had been met before issuing the Automatic Stay that put an immediate stop to collection efforts by the creditors named on the petition.

Oklahoma City Bankruptcy Law Center

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was a law that added requirements to getting to the discharge of debts for those who needed bankruptcy protection, as it required a debtor to undergo and complete pre-filing credit counseling and post-filing financial management courses prior to a discharge being granted. While many feel that these added steps add little or no benefit to the debtor, it does not prevent filings when necessary, so if you need financial help, contact the Oklahoma bankruptcy attorneys at Atkins & Markoff today to schedule an initial consultation.