Authors: Edward C. Liu, Legislative Attorney
Abstract: Section 106 of P.L. 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 (BAPCPA), creates credit counseling requirements for consumers seeking to file for
bankruptcy under Chapter 7 (governing the liquidation of a debtor's assets) and Chapter 13
(governing the financial reorganization of a debtor's assets). BAPCPA amends the U.S.
Bankruptcy Code, 11 U.S.C. §109, to require an individual to receive credit counseling before
filing a petition for bankruptcy. In certain circumstances, these requirements may be waived.
BAPCPA also requires debtors, after they file for bankruptcy relief, to take a personal financial
management course. Both credit counseling agencies and personal financial management
instructional course providers must obtain approval from a U.S. trustee before offering a course to
satisfy these requirements. Section 106 of BAPCPA creates a new provision that specifies the
approval requirements for both credit counseling agencies and personal financial management
instructional courses. Finally, section 1220 of the Pension Protection Act of 2006 amends the
Internal Revenue Code and establishes new standards that a credit counseling organization must
meet to be exempt from federal income tax.
Pages: 11
Date: February 26, 2010
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