Bankruptcy is complicated business; that’s why a number of attorneys specialize only in debt relief law. For the average consumer, the prospect of seeking debt relief in Federal court is daunting, and rightly so. For that reason, many bankruptcy filers seek professional legal assistance. What many consumers do not realizes is that professional credit counseling is now required for anyone who files. You can still file without a lawyer, but you may not file without seeking credit counseling first.

Here are some frequently asked questions regarding credit counseling and filing for bankruptcy:

Can I go to any credit counselor?

You must meet with a counseling agency that is approved by the U.S. Trustee’s office. The U.S. Trustees have criteria that must be met by any and all counseling companies, and not all qualify. You may find a list of qualified agencies at the U.S. Trustees’ Website; qualifying agencies will provide you with a certificate upon completion of the counseling session. Seeking counseling by an agency that has not been approved by the Government will mean that your application for bankruptcy will be denied.

Must I meet with the counselor in person?

You may meet in person or you may consult over the telephone or via the Internet. Many counseling agencies conduct group sessions using conference calls. You may meet with a counselor in person if you want to or if it is convenient for you to do so.

Is credit counseling expensive?

Congress has set a suggested price for the counseling session of $50, which may be waived if you cannot afford to pay it.  Counseling agencies are largely providing these sessions as a service; offering counseling for $50 is not particularly profitable. 

Won’t the agency simply try to talk me out of filing for bankruptcy?

In the past, many agencies have tried to talk consumers into enrolling in an expensive debt management program instead of filing for bankruptcy. Debt management programs can be quite profitable for the consulting company, as they receive a share of the repaid debt. A number of unscrupulous agencies have been caught trying to steer all of their clients into expensive debt repayment programs. Since the new bankruptcy law has gone into effect, 97% of debtors have ended up filing for bankruptcy, which suggests that many consumers are too far in debt to pay their way out, even with help from professional assistance.

You may, of course, opt to repay rather than filing for debt relief. The purpose of professional help is to show you all of the options that are available to you so that you might make an informed decision about what is best for you personally. Professionals are there to assist you, guide you, and help you towards a better financial future. The new bankruptcy law is not entirely fair but the mandatory guidance provision was at least intended to help those with problem debt.