When Debt Relief Foundations Depend On Credit Card Companies

One of the most controversial new bankruptcy laws that became effective in late 2005 is set forth in 11 U.S.C. 109(h). According to this new section, all debtors must receive mandatory training in credit and budget analysis at some point in time during the 180 days before filing a petition. And further, only approved courses satisfy this new Code requirement. Education in itself is not controversial, yet mandatory participation which requires disclosure of sensitive financial information raises legal issues.

Who will have access to one's private information? Turns out, credit card companies sponsored the bill to require credit counseling. The same credit card companies also sponsor debt relief foundations that are a primary provider of approved counseling courses. As a sponsor, the paper wall between what some think is a subsidiary, will be the only safeguard against providing adversaries in bankruptcy the opportunity to explore the private records of all debtors in advance.