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One of the novel requirements contained in the Abuse Prevention Act
pertains to credit counseling. After the effective date, all individuals
who file Chapter 7 or Chapter 13 cases must now complete a credit
counseling course. The course must be conducted by a pre-approved
provider within the 180 days before filing. Individuals who file Chapter
11 are not required to attend.
The course must provide counseling
regarding options to avoid filing, a comprehensive budget analysis, and
presumably, discussions about available payment discounts from typical
credit card companies. Because major credit card companies where highly
influential in the implementation of this new provision, unsecured
accounts will be a primary focus.
Critics of this requirement are
concerned primarily with privacy issues. By requiring debtors to reveal
personal financial data, before filing, this information may be used
later to impeach testimony and disclosures contained within the forms
filed with the court. In effect, because many non profit credit
counseling agencies are highly subsidized by major credit card companies
(i.e. financial control and dependence), critics claim that counseling
is an open invitation for counselors to shop for objections on behalf of
card issuing companies and exert undue influence over potential debtors
in bankruptcy when alleging future problems.
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