Based on the 2005 bankruptcy laws, all debtors were from that point forward required to undergo and complete credit counseling before filing a bankruptcy petition that provided the debtor with instant relief from collection efforts by their creditors. The debtors were now required to complete this process by working with credit counseling agencies that were approved by the United States Bankruptcy Trustee’s office.
When a debtor went through this process, the credit counseling agency analyzed the debtor’s overall financial picture and proposed a repayment plan for the debtor that would move towards avoiding the filing of a bankruptcy petition. The credit counseling industry had been in place for several years prior to the passage of this law, but participating in their programs was almost entirely voluntary until 2005.
The debtor was not required to accept the proposed repayment plan before filing for bankruptcy protection, but that repayment plan proposal became a requirement that needed to be included with the original bankruptcy petition so that the court could see that this requirement had been met before issuing the Automatic Stay that put an immediate stop to collection efforts by the creditors named on the petition.