Counseling, delivered by an authorized supplier, earlier than the chapter case is filed, is required.
Fail to get counseling and your case might be dismissed.
That’s my “C” phrase within the chapter alphabet.
Prebankruptcy counseling is meant to insert an goal third celebration between the beleaguered particular person who wants reduction and the grasping lawyer who, in accordance with legend, is hustling everybody into chapter 11, even those that might produce other alternate options.
The requirement for such counseling is basically constructed on delusion. Most significantly, in my 40+ years of expertise, only a few individuals are keen to even meet a chapter lawyer except their debt issues are critical, normally actually critical. So chapter legal professionals not often are available contact with individuals who don’t must file.
After I interview a possible consumer and suggest they don’t file, it’s normally as a result of they’ve vital property they’d lose in chapter. The price of debt reduction is just too giant relative to the associated fee and the loss.
However let’s assume I used to be extra concerned about my charges than my consumer’s welfare, Congress’s treatment in credit score counseling doesn’t have a look at the worth of the debtor’s property and the exemptions obtainable. In the event that they did, the “counselors” can be practising legislation. The individual on the finish of the cellphone is definitely not licensed to apply legislation in California, or, in actuality, wherever.
By requiring credit score counseling, Congress managed to extend the associated fee to the debtor of submitting a chapter case. It additionally spawned a whole business. On the current NACBA conference, there needed to have been two dozen suppliers of credit score counseling, clamoring for the eye of chapter legal professionals.
That’s the venial a part of the story. The unhappy half is that those that attempt to file chapter with no lawyer steadily don’t know in regards to the counseling requirement or the mechanism to hunt a waiver. Since 2005, the chapter code requires the dismissal of circumstances the place there may be neither a credit score counseling certificates or a correctly obtained waiver.
Professional pers look dumbstruck once they study that, having navigated the system sufficiently to have filed their case on their very own, the case might be tossed out as a result of they didn’t get credit score counseling earlier than they filed.
Perhaps my “C” phrase ought to have been “Congress” who created this travesty. (Jay’s chapter “C” phrase is Creditor.)
As it’s, this put up is dropped at you by the letter “C”.
Picture courtesy of takomabibelot
