Below are some commonly asked questions with regards to the BAPCA that took place October 17, 2005.
A: For the first time, financial counseling and education will be mandated by the Bankruptcy Code and will benefit consumers facing serious economic problems. Prior to filing for bankruptcy, individuals will be required to receive a briefing from an approved nonprofit budget and credit counseling agency. Prior to completing the bankruptcy process and receiving a discharge, individuals will be required to complete a course on personal financial management.
A: For most individuals, whether they should file for bankruptcy is one of the most serious financial decisions they can make. Consequently, that decision should be made only after knowing what the bankruptcy process entails, the consequences of filing for bankruptcy, and the available alternatives to filing for bankruptcy. The pre-filing counseling session will enable consumers to fully understand the potential advantages, disadvantages of, and alternatives to, declaring bankruptcy before taking action.
The NFCC believes that helping consumers to fully understand the implications of bankruptcy and the possible alternatives will enable them to make an informed decision about whether bankruptcy is the best option for their specific financial circumstances.
A: On and after October 17 2005, all individuals filing for bankruptcy under Chapter 7 or Chapter 13, will be required to participate in an pre-bankruptcy filing counseling session with an approved nonprofit budget and credit counseling agency within six months of filing. The agency providing the session must be approved by the Executive Office for U.S. Trustees (EOUST). (Agencies located in North Carolina or Alabama must be approved by the local Bankruptcy Administrator). Consumers who receive pre-filing counseling with an NFCC member agency can expect:
A: Before a bankruptcy is finalized and debts can be discharged, consumers will be required to complete a pre-discharge financial education course from an EOUST (or Bankruptcy Administrator)-approved agency. The NFCC believes that the pre-discharge financial management educational course will provide more Americans than ever before with the financial know-how they need to manage their money, keep their personal finances in order and reduce the chance of future financial problems.
The following is an overview of what to expect from the pre-discharge education:
A: Consumers intending to file for bankruptcy or waiting for debts to be discharged after filing will need to select an organization approved by the EOUST (or Bankruptcy Administrator) to provide such services. Visit www.nfcc.org for a list of NFCC members with EOUST approval, and for general tips on how to select a reputable credit counseling agency.