Q: How does an individual locate an agency that offers credit counseling in languages other than English?

A: If an approved agency offers services in languages other than English, those languages are noted on the agency profile under the judicial district where approved to provide services. The majority of services for individuals with limited English proficiency are offered via the telephone, although there are a number of agencies offering in person counseling in languages other than English.

Updated: August 2006

Q: For agencies proposing to offer debt management plans, what documentation of required bonding and insurance needs to be submitted with the application? (Reference section 6.5 of the application.)

A: If available, the required original bond(s) and/or proof of adequate fidelity insurance should be submitted with the application. This will help expedite the application review process.

If the required original bond(s) and/or proof of adequate fidelity insurance are not readily available, an application may be submitted for preliminary review. Final approval is subject to submission of the original surety bond and/or proof of adequate employee bonding or fidelity insurance.

Updated: July 2006

Q: Once approved by the U.S. Trustee Program as a credit counseling agency, does the agency need to remain compliant with State laws, e.g., in such areas as licensing, permits, bonding, etc?

A: Yes. U.S. Trustee Program approval is not an exemption from compliance with applicable State laws. An approved agency must be in compliance with all applicable State laws to remain as an approved agency in that State. An agency should periodically review State laws to ensure continued compliance.

Updated: February 2006

Q: What should a credit counseling agency do if it wants to change the services it provides, the method it uses to provide such services, or add judicial districts in which it provides services?

A: Any time an agency wants to add to the type of services it is currently approved to provide, or change the method it uses to provide the services, the agency must obtain further approval from the U.S. Trustee Program. An example would be if an agency wants to add telephonic or Internet counseling sessions. The agency must revise the corresponding page of its original application and forward it, along with an original signature of the agency’s authorized official under penalty of perjury as contained in Section 8 of the application, to the U.S. Trustee Program for its review and approval. The U.S. Trustee Program will not accept notification of changes done by email or over the telephone. Similarly an agency must supplement its application by providing an amended Appendix A, Appendix B, and the new bonding information, together with a new signature page, when it wants to add judicial districts. Such requests should include supporting documentation that demonstrates the agency has adequate counselors and resources to service the additional districts.

Updated: February 2006

Q: When must a credit counseling agency commence providing services?

A: An approved agency must be ready to provide services immediately upon approval. If an agency is not prepared to provide all means of services upon approval, it must advise the U.S. Trustee Program immediately so that the unavailability of services can be noted on the approved list posted on the Program’s Web site.

Updated: February 2006

Q: Can an attorney apply to be a credit counselor and/or debtor educator?

A: Attorneys are eligible to be approved as credit counselors and/or debtor educators, provided they meet the requirements set forth in Section 111 of the Bankruptcy Code. However, there may be state bar ethical considerations or other factors that limit an attorney’s ability to provide these services or restrict how the services are rendered.

Updated: August 2005

Q: May a credit counseling agency charge a separate fee for the issuance of a certificate which must be filed with a bankruptcy case?

A: An agency should clearly disclose to a consumer the fee that it charges for a counseling session, including any fee for the issuance of a certificate. There may not be a separate fee or charge for a certificate above and beyond the fee for the counseling session unless such fee is disclosed before the initial counseling session. An agency must always provide services, including issuance of the certificate, without regard to a client’s ability to pay.

Updated: February 2006

Q: May a credit counseling agency’s “d/b/a” appear on the credit counseling certificate?

A: No. A certificate may only be issued under the name of the approved agency as it appears on the U.S. Trustee Program’s Web site. This will allow the U.S. Trustee to insure that only approved agencies are issuing certificates.

Updated: February 2006

Q: May an approved credit counseling agency that is also an approved provider of personal financial management instructional courses offer both services before a bankruptcy case is filed?

A: No. The Bankruptcy Code requires (with few exceptions) that credit counseling must be completed BEFORE an individual files for bankruptcy, and that debtor education must take place AFTER the bankruptcy case is filed. Accordingly, it is not appropriate for an approved agency to offer both services to clients in one pre-bankruptcy session.

Updated: August 2006

Q: May a credit counselor advise a client on whether or when to file bankruptcy?

A: No. The decision on whether or when to file bankruptcy can only be made by the consumer and his/her attorney. Advice on the timing and necessity (or lack thereof) of a bankruptcy may constitute legal advice which could be deemed to be the unauthorized practice of law and be actionable by State authorities.

Updated: February 2006

Q. Do individuals with primarily business debts have to obtain credit counseling prior to filing a chapter 7 or chapter 13 bankruptcy?

A: Yes. Individuals who have primarily business debts must obtain credit counseling prior to filing bankruptcy.

Updated: February 2006

Q. Do individuals with primarily business debts who intend to file a chapter 11 bankruptcy have to obtain credit counseling prior to filing bankruptcy?

A: Yes. Individuals who file a chapter 11 business reorganization must obtain credit counseling from an approved agency.

Updated: February 2006

Q: What determines an individual’s “ability to pay”?

A: Ability to pay must be determined on a case-by-case basis. One factor that must be considered is the client’s personal financial situation as reflected in the budget analysis that is completed pursuant to the statute.

Updated: August 2005

Q: Is it mandatory that a counseling session be at least 90 minutes?

A: 90 minutes is an average. The USTP understands that counseling sessions may vary in length based on each client’s specific situation, and that some sessions may be less than 90 minutes.

Updated: August 2005

Q: May a credit counseling agency refer a client to another agency for the purposes of a debt management plan (DMP)?

A: An agency may only refer a consumer for a DMP to an agency that is a U.S. Trustee Program approved credit counseling agency.

Updated: February 2006

Q: May a credit counseling agency charge a separate fee for the issuance of a certificate which must be filed with a bankruptcy case?

A: An agency should clearly disclose to a consumer the fee that it charges for a counseling session, including any fee for the issuance of a certificate. There may not be a separate fee or charge for a certificate above and beyond the fee for the counseling session unless such fee is disclosed before the initial counseling session. An agency must always provide services, including issuance of the certificate, without regard to a client’s ability to pay.

Updated: February 2006

Q: May a credit counseling agency change its fee structure after approval of its application?

A: If a credit counseling agency makes a change or deviates from the schedule of fees submitted in its application to be an approved provider, the U.S. Trustee Program must be notified. Fees, contributions, or payments received from clients for counseling services shall be reasonable in amount, and an agency must provide services without regard to a client’s ability to pay and may not withhold a certificate of counseling because of an inability to pay.

Updated: February 2006

Q: Once approved by the U.S. Trustee Program as a credit counseling agency, can the agency represent that the fee it charges is federally mandated or required by law or the Department of Justice?

A: No. An agency may never represent that the fee it charges is federally mandated or required by law or the Department of Justice. An agency must provide credit counseling services without regard to a client’s ability to pay and must disclose the possibility of a fee waiver or fee reduction prior to beginning the counseling session.

Updated: February 2006

A: The United States Trustee Program does not object to payments for credit counseling services being made by a person(s) other than the consumer, so long as such payments are reasonable and comply with applicable laws, regulations, and ethical requirements. This position assumes that payments are fully disclosed, do not jeopardize the non-profit status of the credit counseling agency, and do not adversely affect the quality of the counseling services rendered.

Updated: November 2005

Q: What determines an individual’s “ability to pay”?

A: Ability to pay must be determined on a case-by-case basis. One factor that must be considered is the client’s personal financial situation as reflected in the budget analysis that is completed pursuant to the statute.

Updated: August 2005