Congress Added Credit Counseling To Bankruptcy - They Should Take Their Own Advice


After listening to all the talk about raising the debt ceiling, it dawned on me about the changes that Congress made to the bankruptcy code in 2005. When the bankruptcy code changed in 2005, Congress added a pre-and post-bankruptcy credit counseling course that was required for every one filing for bankruptcy. And then it clicked, it's obvious that Congress should take their own advice and have a rule before anyone can come into the House of Representatives or the Senate, they'll be required to take credit counseling to explain what it means to spend more than you have coming in. If any of these representatives were running their own household they would be filing for bankruptcy. The difference between them and us though is when they are short and they can't borrow the money they just print some more. I wonder how the IRS would feel about me paying my taxes with money I made on my home copy machine. I'm sure it wouldn't go over too big.

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What's interesting is how our government is so out of touch that they don't live by the same rules that we have to. Lately, America's credit rating got dropped to a AA and every politician instead of figuring out a solution for the problem has gone out and blamed the other side of the aisle for the downgrade. My grandfather used to say when you're pointing your finger at someone else, you have three pointing back at you. The bottom line is, filing bankruptcy is not an option for an economy as large as ours and that leaves the only other option which is to stop spending so much money.

Looking at what's required of an individual to file personal bankruptcy, first and foremost a debtor is required to complete a pre-bankruptcy credit counseling course and a financial management course, after the 341 meeting, but prior to the bankruptcy discharge. When most debtors hear that they have to do this prior to filing bankruptcy, they let out a groan. But talking to people after taking the courses, most will say that they really got a lot out of it. Looking at it this way, this change was actually something that was good. It's important to understand how the debtor got into the situation that put them into bankruptcy, so hopefully, after the discharge they will be able to avoid the same mistakes. Many debtors leave a bankruptcy filing virtually debt free, if they don't own a home or have a car payment. This in itself, if left unchecked would be like giving a pyromaniac a book of matches. Shortly after the bankruptcy filing many predatory lenders come out of the woodwork and prey upon these debt free souls. This is where the education they got from credit counseling and the advice from their bankruptcy attorney will hopefully ring out.

After filing for bankruptcy, most attorneys will recommend that their clients continue with their financial management education. With the right education most debtors should be able to avoid the mistakes of their past and get the fresh start that bankruptcy was created for.


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