When you file for Chapter 7 or Chapter 13 bankruptcy, there is a federally mandated requirement that you undergo credit counseling and debt education courses before and after your filing. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 required all filers to get courses through government-approved credit counseling agencies. However, that stamp of approval doesn’t mean all counselors are alike.
You should do your homework before committing to a credit counseling agency. Make sure they are on the list of approved agencies on the Department of Justice’s website first. Then, determine whether you want to do your counseling over the phone, the Internet, or in person. Once you find a few agencies that offer the service you need in a way that is convenient for you, you should ask a few questions. What services do they offer? Will they waive their fee if you can’t afford it? Can they help you come up with a plan to avoid debt in the future? How will they keep your information confidential? Do their employees work on commission?
Your bankruptcy lawyer will probably have recommendations for you based on classes that other clients have taken.
The last question is especially important since many credit counseling agencies exist to sell debt management plans. Debt management plans work by having credit counselors enroll clients for a monthly fee, and then work with creditors to negotiate lower monthly payments on their debt. The debtor then pays all their debts through the credit counseling agency. It works much like a Chapter 13 bankruptcy, which also negotiates down debt and repayment through a payment plan, but you are also paying a monthly fee on top of your debt and you don’t get the protection of the automatic stay.
Over the past 30 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.
About the Author
Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More