Under the bankruptcy law, an individual who wishes to file for bankruptcy is required to obtain debt, credit, and budget counseling before filing for bankruptcy. The counseling is required to be performed within six months before the bankruptcy filing occurs. If the individual decides to file for bankruptcy after the requisite debt/credit counseling, a certificate from the counseling agency must be presented confirming that the consumer received the counseling before the bankruptcy case was filed. However, not just any debt/credit counseling agency will be sufficient. The agency must be approved by the United States Trustee Program and a list of approved agencies can be found at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm. The agencies are searchable on the website by state.

The counseling is provided either in-person, on the telephone, or over the internet. Each agency is different with regard to the way the counseling takes place. Most approved agencies charge between $30 and $50 for the pre-filing counseling. However, the law requires approved agencies to provide bankruptcy counseling and the necessary certificates without considering an individual's ability to pay. If the individual can not afford the fee, it should be requested that the agency provide the counseling free of charge or at a reduced fee.

Even though a consumer obtains the debt/credit counseling required, the counselor may recommend an independent payment plan rather than filing bankruptcy which may pose a roadblock to a Chapter 7 or Chapter 13 filing
 

Jeffrey Herrick