Q: What has changed as a result of the new bankruptcy law?

A: For the first time, financial counseling and education will be mandated by the Bankruptcy Code and will benefit consumers facing serious economic problems. Prior to filing for bankruptcy, individuals will be required to receive a briefing from an approved nonprofit budget and credit counseling agency. Prior to completing the bankruptcy process and receiving a discharge, individuals will be required to complete a course on personal financial management.

Q: What are the benefits of the pre-filing counseling session?

A: For most individuals, whether to file bankruptcy is one of the most serious financial decisions they will make. That decision should be made only after knowing what the bankruptcy process entails, the consequences of filing for bankruptcy and the available alternatives to filing for bankruptcy. The pre-filing counseling session will enable consumers to fully understand the potential advantages, disadvantages and alternatives to declaring bankruptcy before taking action, although it is not meant to provide legal advice or be a substitute for sound advice from a competent lawyer of your choosing.

Q: What will take place during the pre-filing counseling session?

A: Beginning October 17, 2005, all individuals filing for bankruptcy under Chapter 7 or Chapter 13, will be required to participate in a pre-bankruptcy filing counseling session with an approved nonprofit budget and credit counseling agency within 180 days of filing. The agency providing the session must be approved by the Executive Office for U.S. Trustees (EOUST). Note: Agencies located in North Carolina or Alabama must be approved by the local Bankruptcy Administrator).

Consumers who set up an appointment with CCCS of Nebraska, Inc. can expect the following:

Estimated length: A counseling session of approximately 90 minutes maximum.

Content: The session will include a discussion of the circumstances that led the consumer into financial difficulty, an overview of the bankruptcy process, a discussion of possible alternatives to bankruptcy, including advantages and disadvantages; and a personalized budget analysis.

Format: Counseling can be face-to-face or over the telephone.

Certificate: Consumers will receive a certificate indicating that they completed the counseling session. Should they decide to file for bankruptcy, they will have to include the certificate in the filing with their bankruptcy petition.

Q: What are the consequences of bankruptcy?

A: Click here to see some of the consequences.