Upcoming Changes to Bankruptcy Abuse and Consumer Protection Act

July 11, 2013 - PRLog -- July 1, 2013 – Enacted in 2005, the Bankruptcy Abuse and Consumer Protection Act (BACPA) mandates a Credit Counseling and Debtor Education session with an approved agency before and after filing for bankruptcy.  The intention is to provide consumers who are considering bankruptcy or who have filed for bankruptcy with the information necessary to make informed decisions. The Credit Counseling can be done in person, over the telephone, or online.  Debtors considering bankruptcy are asked to enter their monthly income and expenses in addition to listing their assets and liabilities. This information is then made available to a certified credit counselor and any questions regarding the debtor’s finances can then be addressed.

Effective April 15^th, 2013 new regulations went into effect for the Credit Counseling requirement of the BACPA.  Most important among these changes are that Internet and telephone counseling are not considered complete until the Debtor has engaged in meaningful interaction with a credit counselor following the automated portion of the counseling. What’s more, a “reasonable fee” clause has been implemented, providing a ceiling of $50 per debtor per counseling session.  Lastly, all approved credit counseling agencies are now required to issue Certificates of Counseling within one business day of the Debtor’s final briefing with a credit counselor.

As of August 1^st, 2013 DebtorCC, Inc., a non-profit organization will be implementing these new changes to ensure compliance. The online credit-counseling session will remain $9.95 per household, well below the allowable fee of $50.  In addition, certified credit counselors are on hand to speak with Debtors following their Credit Counseling session Monday – Saturday. Finally, all Certificates of Counseling are emailed within 10 minutes after the debtor speaks to a counselor. For more information visit www.debtorcc.org