Archive for June, 2009

Courses Required Under the 2005 Bankruptcy Laws.

Sunday, June 14th, 2009

The 2005 Bankruptcy Laws require debtors to take 2 courses called “credit counseling” and “debtor education”. These courses are mandatory for all individual debtors.

The first course is called credit counseling and its purpose is to go over your income and expenses budget. It is mandatory that you complete this course PRIOR to filing your bankruptcy petition. There are many non profit organization that provide these service however they must be approved by the court that you will be filing your bankruptcy in.

Usually the attorney who will help you file your bankruptcy can guide you to such an agency. At our office, we provide our clients with a 30 minutes video to watch prior to taking the course and we also electronically register the client to take this course online. It has been our experience that this helps our clients in expediting the completion of the courses. Once the course is completed, our office will receive the certificate automatically and we will proceed in filing the petition.

The second course is required to be completed within 45 days from the creditors meeting. This course is called debtor education and its purpose is to educate the debtor of different financing and credit information to better prepare them for their future credit needs.

The court will not grant the debtor the bankruptcy discharge until this second course is completed and the certificate of completion filed with the court.  Again, your attorney can help guide you to agencies that provide this course as well.  Most agencies provide both courses to the debtor thereby streamlining the process.

Our office will also register you automaticaly upon retaining our services and provide you with the ability to complete this course over the internet or by phone and help you get the discharge.

I should be noted that the agencies that provide these two courses are called “credit counseling” and should not be confused with “credit consolidation” companies.

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The Stigma of Bankruptcy, is there one? who perpetuates it?

Saturday, June 6th, 2009

A common concern I hear from clients is the stigma with filing bankruptcy. Bankruptcy is a legal option that the United States Congress has made available. A debtor should not dismiss Chapter 7 or chapter 13 bankruptcies as an option until they have taken a short time to educate themselves on this subject.

The stigma is perpetuated by creditors who want to discourage debtors from filing bankruptcy, companies who have a financial interest in keeping debtors in debt such as debt consolidation companies, or individuals who simply do not know.

The stigma against debtors has greatly diminished over the past years and particularly in these times where even major corporations are forced to seek bankruptcy protection. Under the bankruptcy laws, a debtor cannot be discriminated for employment due to a bankruptcy filling. And while a chapter 7 or 13 bankruptcy can remain on your credit report for up to 10 years, you will begin to rebuild your credit within one to two years. (see our prior posts about bankruptcy and credit.)

Its best if debtors take a minute and explore the legal options made available to them by law. They should not be misinformed by rumors or self-serving statements of companies who have their own interest in mind. Bankruptcy is not an easy decision, but in certain financial situations, it’s the right decision.

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  • Roland H. Kedikian, Esq.

    Mr. Kedikian has been a practicing attorney since 1997 and has concentrated his practice in Bankruptcy ever since his admittance to the California State Bar. He has developed his skills and understanding of bankruptcy with emphasis on Ch7 consumer and business filings. Over the past 12 years as a bankruptcy attorney, he has successfully filed and obtained bankruptcy discharge to all his clients to date.

    Mr. Kedikian is proud to provide professional legal advice to his clients and has an exemplary record.

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