Credit Counselor Refuses to Issue Credit Counseling Certificate to Debtor Facing Impending Foreclosure

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For Immediate Release- September 17, 2007

Houston Bankruptcy and Family Law Firm Busby & Associates Use Case History as Resource Tool and Consumer Education

HOUSTON – Continuing a campaign to educate the public and turn case history into valuable resources, leading bankruptcy and family law firm Busby & Associates detail errors made in a recent bankruptcy case.

According to attorneys for the firm, a debtor in Harris County, Texas panicked as he stood days away from the foreclosure of his home. Recognizing that he had little time to pursue any other options as it was Friday afternoon of Labor Day weekend with foreclosure scheduled for Tuesday, he decided to file a Chapter 13 bankruptcy claim in order to save his home.

Under the Bankruptcy Abuse and Consumer Protection Act of 2005, before a debtor can file for bankruptcy, he must undergo credit counseling – professional advice provided by qualified credit counselors to help consumers find ways to repay their debt through careful budgeting and management of money. The debtor sought credit counseling in order to fill this requirement and found an available organization able to assist him just before the holiday weekend, explained Busby & Associates partner Michael Busby.

Located via the Internet and available for counseling over the phone, the counselor entered into counseling sessions with the debtor.

“Though upon completion of the sessions, the debtor was refused certification because the counselor believed that he was ‘filing bankruptcy for all the wrong reasons and should call back on the following Tuesday,’ ” said Busby.

“It is not the job of a counselor to interject personal belief in this process. They have no authority to withhold counseling certification upon completion of credit counseling,” he added.

The debtor solicited the assistance of his lawyer, who questioned the credit counselor about the authority given under bankruptcy law making it possible for her to deny the issuance of a certificate of completion once credit counseling was complete. The defensive counselor transfers the debtor and his lawyer to another counselor, who promptly issues a certificate of completion.

On April 27, 2007, a year and six months after the Bankruptcy Abuse and Consumer Prevention Act of 2005 was passed, the Government Accountability Office (GAO) issued a report based on findings from a study concluding that the value of requirements under the law passed in 2005 were not clear.

Going by the requirements, the debtor in this case was considered valueless, but the cases still hold that one cannot file for bankruptcy until a credit counseling course has been completed and a certificate of completion is received. Anyone who is not in compliance yet files for bankruptcy will either have their bankruptcy claim stricken or their case dismissed.

Busby & Associates is a leading Houston-based consumer bankruptcy and family law firm that specializes in debt relief and bankruptcy cases. They are members of the National Association of Consumer Bankruptcy Attorneys. Log onto or call toll free at (866) 912-9382 to find out how they can help you avoid a situation like this.

Contact: Michael Busby, Jr.
Busby & Associates
2909 Hillcroft #350
Houston, TX 77057
(713) 974-1151

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