Fee Waivers for Bankruptcy Counseling

[DaffyD]

I just wanted to let everyone know that Federal law provides that if you can't afford to pay for bankruptcy certificates, you can ask for a fee waiver from the bankruptcy counseling company. Usually an attorney will fax the request to the company, giving the reason why the client can't afford the fee. If you're not working with an attorney, you can fax in this letter yourself. The bankruptcy company is obligated to provide the certificate(s) at no charge after these fee waiver requests are received.

[justbroke]

If you filed with an attorney, the Court will usually not entertain ANY fee waivers for filing or for education, since you could afford the attorney.

[DaffyD]

justbroke, I must disagree with you. I am a Bankruptcy Counselor and I grant fee waivers requests from attorneys on behalf of their clients everyday. The court has nothing to do with fee waivers. The legal requirement for bankruptcy is that you submit two certificates to the court verifying pre-filing counseling and post-filing debtor education. The judge has no idea if these were paid for or not and it's immaterial. In addition, a lawyer who is asking for a fee waiver for his client is most likely either working pro bono or for reduced fees. An attorney is not going to charge a client $2000 for a bankruptcy and then ask a credit counseling agency or a debtor education provider to waive a $50 fee.

[HHM]

I think you guys are talking across each either

DaffyD is talking about fee waivers for the Education Certificates. If a company wants to waive the fee, it can.

Justbroke is talking about the Bankruptcy Court Filing Fee

You are both right.

[justbroke]

I apologize. I have read in several Districts where they will not approve a waiver of the filing fee if the debtor is represented. Of course, like most things in Bankruptcy, this may differ amongst the Districts.

I don't know about education waivers. I would agree that if they are represented by an attorney who is collecting a fee themselves, they should not be granted a waiver of the education fees. That's just me.

Why should I pay for it as a pro se debtor when someone with an attorney (who is working under a free agreement themselves) can get the fees waived? Even if this attorney is making $500 or $2000. It shouldn't make a difference. It makes no sense... but that's just me... and is why (most) of the Districts won't do it for the filing fee if you are represented by an attorney to whom you're paying a fee.

Thanks for clarifying it though for me. I did try to make my statement neutral and likely to happen but not definite. Your counseling agency seems to not care about the debtor's is actually indigent.

[DaffyD]

HHM, you were right on both counts: justbroke was referring to waiving filing fees and I misunderstood him. Regarding waiving of counseling fees, the federal government requires it if a client states he cannot afford to pay it. It isn't my job to question whether the client deserves the waiver or not. On the flip side, I have clients who will become slightly indignant at the suggestion that their certificate fees could be waived. Even though they are filing for bankruptcy, it is a matter of personal pride that they can still afford to pay $100 for both certificates. Also, more clients are representing themselves in bankruptcy cases instead of paying an attorney.

As for the waiving of filing fees, I can't comment on that since that is not my area of expertise. What I can say is that after having reviewed hundreds of budgets, I have no problem with a judge who will waive the fees for the truly indigent. And with the present shape of the economy and unemployment, there are many more people who fall into this catagory then you would think.

[justbroke]

Strange how the indigent become indignant when you tell them they can't afford something. Yes, pride kills.

[jtallerie]

I did the required Credit Counseling Class in March. The company just sent me a refund of the 50.00 fee. I never asked for any discount or break of any kind. I am flat broke. I was soooo grateful.

I have a feeling, depending on what state you live in, if you fall within certain guidelines they refund your 50.00 fee for the Credit Counseling Class. I just got the 50.00 check from Consumer Credit Counseling Service. I am go grateful. I guess that Consumer Credit Counseling Services felt that I was not able to afford to pay for the Required, Counseling Session

[DaffyD]

justbroke--nice word play. I wish I knew if you were serious about "pride kills" because I definitely believe that it can. But like jtallerie, if someone gave me a $50 refund and I was broke, either "just" or otherwise, I'd be grateful. and jtallerie, I'm familiar with CCCS but it's hard to say why they unilaterally decided to issue the refund. I'm not aware of any state law that mandates it, and my company operates in all 50 states. It would be interesting to know who made the decision, and it does speak highly of that company. You should find out if they are certified to issue the Certificate of Debtor Education (not all credit counseling agencies are) and if they will waive that fee up front for you. With my company, if you are not represented by a lawyer, you can fax us a fee waiver request yourself and we will grant it.

[jtallerie]

I know for sure that this company is certified to do the Certificate of Debitor Education. The paperwork for the class has been already turned into my atty. I even had to give a code from my atty office.

I do have an atty. However I did not have the $ to pay him. My son paid for the deposit.

The check came from:
Consumer Credit Counseling
Client Trust Account
100 Edgewood Ave N.E. Suite 1800
Atlanta, GA, 30303-3006
Phone 404-527-7630

If this can help someone else in my position that would be great. I did lay out the 50.00. When they go over all your finances in the class they ask you how much $ you have in checking and savings and about your expenses. In black & white I don't look that great on paper. The truth is that I could not afford the class, I am in the process of trying to dig my family out of a mess. It was a hardship for me to pay for it. I am still shocked, they gave me my $ back. What a blessing!

I don't have anything left to give up, or cut back on for that matter. I am in the position that I am in, due to being unemployed / and then underemployed. I do have a confession to make, I did blow $, 2 weeks ago I went to the movies with my dh. It was wonderful, the last movie I saw in a theater was about 8 yrs ago. We never go to movies or dinner, too expensive.

[justbroke]

After going what I have gone through... I'd take $50 any day! My mom used to offer me $20, $40 here and there and I'd always tell her that I want "real" money and $20, $40, $100 wasn't real money.

I now know that it is real money and I wouldn't cry if someone refunded me the filing fee or even the cost of my debtor education!

[DaffyD]

Credit counseling agencies will operate in different ways. Mine will enable you to avoid any up front certificate fees by issuing you or your attorney a code before you start a class so that there is no need for a refund. We also have you set up a budget, entering your income--if any--, expenses, and list of secured and unsecured creditors. That is the moment of truth for many people when they see right in front of them the financial shape they're in because many people heavily in debt never tracked their spending vs income or balanced their checking accounts. Others know all too well the hole they're in, especially if they were self-employed. My company's credit counseling and debtor education courses give our clients financial tools they can use to maintain awareness of the state of their finances at all times, simply by creating a budget and sticking to it, and balancing checking accounts. We also delve into wise use of credit, the cost of using credit, and dealing with collection agencies since many clients will find themselves in the same financial state again within a few years. Old habits die hard for some people.

"Real" money is defined by your perception and state in life. For someone who's working but is $300K to $2M or more in debt, $100 is chump change. But to someone unemployed and discharged from bankruptcy, or to a 20 year old college student, $20-$100 may be the difference between being able to buy food, pay a bill, do laundry, or simply put gas in the car. We talked about pride earlier. If someone is willing to give you whatever they can afford to help you, put pride aside. It helps them to feel good that they were able to help you, and you have a few extra bucks you weren't counting on.

Don't begrudge yourself spending the money to go to the movies. We all deserve some R&R in our lives, especially if it's time spent with family.