When the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was enacted in 2005, the rights of Americans file bankruptcy at the “11th hour” became incredibly difficult. Banks, lenders, and other financial institutions lobbied Congress to enact BAPCPA in an effort to reduce the number of Chapter 7 bankruptcy filings by forcing individuals normally eligible to file a Chapter 7 bankruptcy case, to file a Chapter 13 case instead, which requires them to repay their disposable income to unsecured creditors.
Prior to Congress passing BAPCPA, consumers could complete and file a bankruptcy petition immediately. You could be walking down the street, pass bankruptcy court, and, then and there, decide to file bankruptcy. Someone in danger of losing his or her home could file a bankruptcy case at 9:59 prior to a 10:00 foreclosure sale.
However, BAPCPA now requires debtors to complete a credit-counseling course before a bankruptcy case may be filed. There are exceptions. However, these are rarely granted. It’s important to remember for anyone considering bankruptcy that failure to meet the credit counseling course requirement will result in dismissal of the bankruptcy case.
Now, anyone with an imminent, impending foreclosure sale cannot file a bankruptcy case to save their home.
The intended purpose of obligating debtors to participate in credit counseling supposedly is to review and evaluate their financial circumstances while educating them about the alternatives to bankruptcy. Credit counseling also helps prospective debtors learn how to create an effective budget so that after their bankruptcy case ends, they may avoid any further bankruptcy filings. A prospective bankruptcy debtor must complete a credit-counseling course within 180 days of filing a bankruptcy case. You can avoid this problem by consulting with an experienced Utah bankruptcy attorney who can ensure that you meet all prefiling requirements.
Bankruptcy often provides a fresh start for individuals suffering from temporary financial instability that makes it difficult to repay their debts. The Morrison Law Group can help if you just need to talk about your Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.
