The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) mandates a prepetition credit briefing and a post petition financial management course before a bankruptcy petition is discharged.
An agency conducting prepetition credit briefing and post petition financial management course must be approved by the Executive Office for U.S. Trustees (EOUST).
A bankruptcy petitioner should identify an approved credit counseling agency and have to determine whether the services offered by the agency are suitable for his/her situation.
Before selecting a credit counseling agency one should check whether:
- the Credit counseling agency is non-profit;
- the Credit counseling agency is in business for a considerable period of time;
- the Credit counseling agency is accredited and the accreditation is current and not lapsed;
- the counselors at the credit counseling agency are certified.
A good credit counseling agency provides guidance and suggests best approach to manage debt of consumers. An eminent agency also regulates payments and identifies tips to avoid financial obligations in future.
Making use of the help of a good credit counseling agency could help consumers in gaining financial stability. These credit counselors instructs consumers in staying on focused with financial targets.
Before signing a contract with a credit counseling agency, one should read the agreement thoroughly. The agreement should provide amount of fee charged by the agency, a description of services offered, an expected payoff plan, and details of termination of agreement. The agreement should also suggest a dispute resolution method.