Credit Counseling Exemptions

Under the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA, bankruptcy courts now require debtors to undergo credit counseling sessions in order to successfully file for bankruptcy. While there are doubts filed by the government’s own watchdog organizations regarding the use of counseling, the law remains unchanged. However, there are some exemptions to the law that provide debtors in extreme circumstances the option to not attend counseling and move on with their bankruptcies.

There are a few different types of exemptions, each of which providing a rationale of why counseling would be useless. In these cases, it may be proof that an individual does not have the time or can be reasonably expected to attend counseling sessions or proof that an individual must file bankruptcy, and cannot be reasonably expected to try a different financial tactic to protect their finances.

In particular, a major exemption is permitted to those with physical or mental disabilities that would prevent these people from benefiting from a form of credit counseling. In particular, if a person with a physical disability is unable to generate income beyond compensatory funds provided to them or similar income, credit counseling may be useless, as these individuals may not have a great deal of control over their own expenses. Likewise, those without the mental capability of appropriately handling responsibilities such as personal finances may exempt themselves from the counseling process.

Physically speaking, it is also difficult for those in the armed forces to go through the credit counseling process. These service members, if in an active campaign, are allowed to skip the counseling sessions otherwise required by law due to their extreme circumstances. It would be beyond excessive to ask these individuals to go through counseling while in combat.

If you have questions concerning the bankruptcy process, contact a bankruptcy attorney.