Credit Counseling Requirements for Consumer Bankruptcy

Edward C. Liu
Legislative Attorney

Section 106 of P.L. 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), creates credit counseling requirements for consumers seeking to file for bankruptcy under Chapter 7 (governing the liquidation of a debtor's assets) and Chapter 13 (governing the financial reorganization of a debtor's assets). BAPCPA amends the U.S. Bankruptcy Code, 11 U.S.C. §109, to require an individual to receive credit counseling before filing a petition for bankruptcy. In certain circumstances, these requirements may be waived. BAPCPA also requires debtors, after they file for bankruptcy relief, to take a personal financial management course. Both credit counseling agencies and personal financial management instructional course providers must obtain approval from a U.S. trustee before offering a course to satisfy these requirements. Section 106 of BAPCPA creates a new provision that specifies the approval requirements for both credit counseling agencies and personal financial management instructional courses. Finally, section 1220 of the Pension Protection Act of 2006 amends the Internal Revenue Code and establishes new standards that a credit counseling organization must meet to be exempt from federal income tax.


Date of Report: February 26, 2010
Number of Pages: 17
Order Number: RL33482
Price: $29.95

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