Pre-Filing Credit Counseling - Just A Formality?

[kornellred]

I may be mistaken, but I have a suspicion that most people attend the mandatory credit counseling course AFTER they have decided to file for BK.

Since I am going to file for Chapter 13 and I must submit to the counseling, I have discovered that the non-profit counseling service that I will be utilizing is in cahoots with the larger banking entities. They derive a great deal of their funding from the big banks when they manage to arrange a payment plan for a debtor which precludes filing for BK. So...the aim is to hopefully find a solution other than BK to solve a debtor's financial woes.

Surely, the credit counseling agencies can't do better than Chapter 7 or Chapter 13 relief. And they must know that. So, in the end, it's just sort of a "go through the motions" exercise, right?

Willie R.

[HHM]

Yes, it is a formality that was inserted into the 2005 BK law.

The goal is to try to steer people away from BK...but you are correct and the statistics bear out your concern, less than 10% of those who take the course are eligible for the type of relief offered by the CCC firms.