In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act was passed, making it much more difficult for debtors to file for Chapter 7 debt discharge. In part, this law was created to stop what lawmakers perceived to be frivolous spending habits that were backed up by a bankruptcy system that did not hold over-spenders accountable for their actions. Not only did the law make the bankruptcy process more stringent, it also included a mandatory credit counseling requirement. However, as the Government Accountability Office has shown, this may not have been the best solution.
For more information regarding the process of bankruptcy and what it takes to file for Chapter 7, contact the Birmingham bankruptcy lawyers of [firm-name], at [phone-number] today.
One of the major problems with the addition of a mandatory credit counseling session prior to filing for bankruptcy is that credit counseling may not very useful for many debtors. This additional step was used as a sort of required education for those who were considering bankruptcy, hopefully preventing them from actually needing to turn to the courts for debt discharge or payment plan options. According to the Government Accountability Office, there are some serious flaws with this system. Problems with credit counseling include:
While credit counseling provides a useful service for some to work their way out of debt, many debtors see this additional step as an unnecessary roadblock towards the larger goal of actually filing for bankruptcy. To learn more about your options during the bankruptcy process, contact the Birmingham bankruptcy lawyers of [firm-name], by calling [phone-number].