Frequently Asked Questions (FAQs) – Credit Counseling
The FAQs have been separated into two major areas: Consumers and Agencies. Some issues may be cross-cutting. Consumers, applicants, and approved agencies may find it helpful to review the questions in each area.
1. Counseling Requirements
Q: Must all individuals obtain credit counseling prior to filing a chapter 7, chapter 11, chapter 12, or chapter 13 bankruptcy?
A: Yes. All individuals who file for bankruptcy must obtain credit counseling, including those with primarily business debts. (11 U.S.C. § 109(h)).
2. Finding a Counseling Agency
Q: Can the United States Trustee Program (USTP) help me find a credit counseling agency or recommend an agency? – NEW
A: To assist individuals in finding a credit counseling agency, the USTP maintains a list of approved agencies on its website. The USTP cannot endorse or recommend any particular agency on its list of approved agencies, or guarantee the quality of its pre-bankruptcy counseling or services.
Q: How does an individual locate an agency that offers credit counseling in languages other than English?
A: Visit the USTP’s list of approved agencies and scroll down to the section entitled “Approved Agencies Offering Services in Languages Other than English and Spanish.” Select the language from the pull down menu.
3. Taking the Counseling
Q: Can I complete my debtor education and credit counseling requirements in the same session?
A: No, the Bankruptcy Code requires individuals to complete credit counseling before filing for bankruptcy, subject to certain exceptions, and requires debtor education to be completed after the bankruptcy case is filed. Therefore, an approved agency may not offer both services to clients in the same session.
Q: May an individual with a power of attorney for a client (such as an incarcerated client) complete credit counseling on behalf of that client? – NEW
A: Yes, if the power of attorney is valid under state law and grants the representative the authority under state law to file a bankruptcy petition. The credit counseling certificate must list both the name of the client and the name of the representative along with that representative’s legal capacity (e.g. John Doe, as Attorney-In-Fact for Jane Doe).
Q: Will the USTP advise whether a power of attorney is sufficient to allow the authorized representative to complete credit counseling on behalf of a client? – NEW
A: No. Because the USTP cannot provide legal advice to private citizens, the USTP cannot advise whether a client's power of attorney is valid under state law and legally sufficient to authorize counseling.
Q: Do individuals need separate financial counseling sessions if intending to file a joint bankruptcy petition?
A: No. Joint filers may attend the same counseling session. The agency must provide personalized counseling to each individual and must issue a separate certificate to each individual.
Q: If my credit counseling agency does not offer debt repayment plans (DRPs, also known as debt management plans, or DMPs), may I still enter into a DRP/DMP? – NEW
A: Yes. If the approved agency you initially visited does not offer DRPs or DMPs, it may refer you to another USTP approved credit counseling agency. The new agency may charge you additional fees; the referring agency must disclose this fact to you.
4. Paying for Counseling
Q: May a person other than the client (such as the client’s attorney) make payment for credit counseling?
A: Yes. Persons other than the client may pay for credit counseling, as long as such payments are reasonable and comply with applicable laws, regulations, and ethical requirements (such as state laws and rules concerning attorney ethics). The agency shall disclose to the client the fee charged and paid for the counseling session. Such payments shall not adversely affect the quality of the services rendered.
Q: May a credit counseling agency charge a separate fee for issuing the credit counseling certificate?
A: Yes. An agency must disclose clearly all fees that it charges for counseling, including any separate fee for the issuance of a certificate, before providing any information to or obtaining any information from a client, and before beginning a counseling session.
Also, an agency must always provide counseling services, including issuance of the certificate, without regard to a client’s ability to pay. See “What if I cannot afford to pay for credit counseling?” below.
Q: What if I cannot afford to pay for credit counseling? – REVISED
A: An agency must inform clients that services are available for free or at a reduced rate, based on a client’s ability to pay, before providing any information to or obtaining any information from a client, and before beginning a counseling session.
Fee waiver policies may vary by agency. At a minimum, however, a client whose household income is less than 150 percent of the poverty level is presumptively entitled to a fee waiver or fee reduction.
The poverty level is defined by the poverty guidelines updated periodically in the Federal Register by the U.S. Department of Health and Human Services under the authority of 42 U.S.C. § 9902(2).
Q: What if I have lost my certificate or it contains an error?
A: Please contact the credit counseling agency that issued your certificate to obtain a replacement or corrected certificate.Source: www.justice.gov