Debtors must receive credit counselingEvery individual debtor, regardless of the chapter under which the individual has filed, must receive credit counseling before filing bankruptcy and again before discharge. If married and filing jointly, both spouses are required to obtain counseling.
Counseling agencies must be approvedThe financial counseling agency must be approved by the U.S. Trustee, who will distribute a list of approved programs to the clerks of the bankruptcy courts. The U.S. Trustee will review each agency’s approval once each year. For an agency to be approved, it must:
- Maintain non-profit status.
- Provide "adequate" counseling.
- Assist consumers without regard to their ability to pay. If the agency charges a fee, it must be "reasonable."
- Fully inform consumers of its fees, funding sources, counselor qualifications, and the possible impact of credit counseling on credit reports. Counselors must be adequately trained and not be paid more for placing consumers in a Debt Management Plan.
- Safeguard client funds, through employee bonding and an annual audit.