Frequently Asked Questions (FAQs) – Credit Counseling
The FAQs have been separated into two major areas: Consumers and Agencies. Some issues may be cross-cutting. Consumers, applicants, and approved agencies may find it helpful to review the questions in each area.
Yes. Every person who files for bankruptcy must obtain credit counseling, including people with primarily business debts.
Please use the list of approved agencies on the USTP website to find approved credit counseling agency. The USTP does not recommend any particular agency, or guarantee the quality of an approved agency's credit counseling.
Visit the USTP’s list of approved agencies and scroll down to the section entitled “Approved Agencies Offering Services in Languages Other than English and Spanish.” Select the language from the drop down list on the left.
No, credit counseling must be obtained before an individual files for bankruptcy, subject to very limited exceptions. Debtor education is a separate course that must be taken after an individual files for bankruptcy, subject to very limited exceptions. Therefore, an agency may not offer both services in the same session.
No. Joint filers may attend the same counseling session and will receive personalized counseling. The agency will issue a separate certificate to each person.
Yes. If the approved agency you initially visited does not offer debt management plans, it may refer you to another approved credit counseling agency. The new agency may charge you additional fees.
Yes. People other than the client may pay for credit counseling, as long as such payments comply with applicable laws, regulations, and ethical requirements (such as state laws and rules concerning attorney ethics). The agency shall inform the client of the fee actually charged and paid on the client's behalf for the counseling session by the other person.
Yes. An agency must disclose clearly all fees that it charges for counseling, including any separate fee for the issuance of a certificate, before providing any information to or obtaining any information from a client, and before beginning a counseling session.
Also, an agency must always provide counseling services, including issuance of the certificate, without regard to a client’s ability to pay. See “What if I cannot afford to pay for credit counseling?” below.
Credit counseling services are available for free or at a reduced rate, based on a client’s ability to pay.
Fee waiver policies vary by agency. At a minimum, however, a client whose household income is less than 150 percent of the poverty level is presumptively entitled to a fee waiver or fee reduction.
The poverty level is defined by the poverty guidelines updated periodically in the Federal Register by the U.S. Department of Health and Human Services.
Please contact the credit counseling agency that issued your certificate to obtain a replacement or corrected certificate.
1. The Credit Counseling Rule is codified at 28 C.F.R. §§ 58.12 – 58.24
There is no deadline for new applicants. However, a currently approved agency must re-apply no later than 45 days before its current approval period expires, unless the USTP grants a written extension.
An agency must be ready to provide services by all requested methods of delivery (i.e., in-person, telephone, or Internet) immediately upon approval. If an approved agency is not prepared to provide services by all requested methods of delivery, it must inform the USTP during the application review process.
Upon receipt of a complete application package, the USTP will send an acknowledgment email to the applicant. A financial analyst will then review the application and will contact the applicant if more information is required.
To ensure adequate and prompt review, applicants should follow the application instructions closely, answer every question completely, provide up-to-date information, and provide all relevant responses and documents.
The USTP accepts applications by encrypted electronic mail, overnight mail, or another secure method with prior approval of the USTP, but not by facsimile. Applications can be completed using a fillable PDF form. Please see the Instructions for Application for Approval as a Nonprofit Budget and Credit Counseling Agency, available on the USTP’s Web site, for further directions concerning application procedures.
Yes, provided that your application for re-approval was submitted timely, meaning forty-five to sixty days before the expiration of your current approval, or you have received written USTP consent to an extension of time to apply.
The original surety bonds and/or proof of adequate fidelity insurance should be submitted with the application.
If the required original surety bonds and/or proof of adequate fidelity insurance are not readily available, you still may submit your application with a copy of the bond and/or insurance policy for preliminary review. Final approval of your application is subject to submission of the original surety bond and/or proof of adequate employee bonding or fidelity insurance.
Attorneys may be approved as credit counseling agencies provided they meet the requirements set forth in 11 U.S.C. § 111, the Credit Counseling Rule, and state laws concerning organization and operation as a nonprofit entity. State statutes, ethics rules or codes, rules of court, or other factors may limit an attorney’s ability to provide these services or restrict the manner in which services are rendered.
Yes. An approved agency must comply with all applicable state laws to remain as an approved agency in that state.
Yes. A credit counseling agency, once approved, may request approval for additional judicial districts by submitting an amended application. The amended application shall list both the additional judicial districts for which approval is being requested, as well as the currently approved districts. See “May a credit counseling agency change the services it provides?” below for complete procedures.
A credit counseling agency may not increase its fees without prior USTP approval. To request approval to increase fees, an agency must submit an amended application setting forth the proposed increased fees, as well as the reason for the increase. See “May a credit counseling agency change the services it provides?” below for complete procedures. An agency may decrease fees without prior USTP approval.
A fee of less than or equal to $50 is presumed reasonable and does not require justification. Fees in excess of $50 must be approved in advance by the USTP by demonstrating, at a minimum, that the agency’s costs for delivering the counseling services justify the requested fee. The agency bears the burden of establishing that its proposed fee is reasonable.
An agency must obtain advance approval from the USTP before making any material change to its credit counseling services by submitting an amended application. The following material changes require advance approval:
- Cancellation or change in the amount of the surety bond;
- Cancellation or change in the amount of the employee fidelity bond or insurance;
- Engagement of an independent contractor to provide counseling services, or to administer DMPs or DRPs, or to otherwise control or account for client funds;
- Fee increases;
- Changes in the agency’s fee waiver or fee reduction policy;
- Expansion into additional judicial districts;
- Change in the counseling method of delivery (i.e., in-person, telephone, or Internet), whether adding or subtracting; or
- Changes to the counseling materials or counseling script.
To amend the application, complete only the relevant portions of the application form, including a newly executed Certification and Signature (Section 9 of the application) and any relevant appendices, and submit all documents to USTP by electronic mail, overnight mail, or another secure method with prior approval of the USTP.
The USTP understands that counseling sessions may vary in length depending on each client’s particular circumstance. Generally, however, counseling sessions should last approximately 60 minutes.
An agency must provide substantive, personalized budget and credit counseling consistent with the requirements in 11 U.S.C. § 111(c)(2)(E) during the counseling session as a whole. The agency must provide:
- an analysis of the client’s current financial situation;
- a discussion of the factors that contributed to the client’s specific financial situation; and
- a plan to address the client’s financial situation without incurring negative amortization of debt.
Internet and automated telephone counseling is complete only after the client has engaged in “live” interaction with a counselor following the Internet or automated telephone portion of the counseling. Such interaction may take place by:
- live chat; or
Agencies that conduct this mandatory interaction by live chat or email must retain tangible records sufficient to verify the content of the interaction, such as chat transcripts, recordings or transcribed recordings of telephone calls, and copies of emails.
An agency may not provide only generic advice concerning financial alternatives to the client. Rather, it shall ensure that the advice addresses the client’s specific financial circumstances. If the automated portion of the agency’s counseling does not thoroughly analyze the client’s individual financial circumstances, or provide a plan to assist the client in specific terms, the interaction between the human counselor and the client must do so.
An agency shall not provide any client diminished counseling services because the client receives any portion of those counseling services by telephone or Internet.
During the mandatory live interaction portion of counseling via the Internet or automated telephone, the agency must verify the client’s identity and ensure that the same person claiming to be the client completes the entire session. To verify the client’s identity, the agency shall:
- obtain one or more unique personal identifiers from the client and assign an individual access code, user ID, or password at the time of enrollment; and
- require the client to provide the appropriate access code, user ID, or password, and one or more of the unique personal identifiers during the course of delivery of the counseling services.
No. The client must decide on his or her own whether or when to file bankruptcy.
Approved agencies should make every reasonable effort to accommodate clients with limited English proficiency. Such accommodation may include providing services in the client's language, or referring the client to an approved agency that offers services in the language in which the client is proficient.
Individuals who have “limited English proficiency” are those who do not speak English as their primary language or have a limited ability to read, write, speak, or understand English.
No. The Bankruptcy Code requires individuals to complete credit counseling before filing for bankruptcy, subject to certain exceptions, and requires debtor education to be completed after the bankruptcy case is filed, subject to certain exceptions. Therefore, an approved agency may not offer both services to clients in the same session.
No. Joint filers may attend the same counseling session. The agency must provide personalized counseling to each individual and must issue a separate certificate to each individual.
The ability to pay is based on the agency’s application of its particular fee waiver or fee reduction policy to the client’s personal financial situation. At a minimum, clients whose household income is less than 150 percent of the poverty level are presumptively entitled to a fee waiver or fee reduction, based on the client’s actual ability to pay. Ability to pay shall be determined based on income information the client submits in connection with counseling services.
An agency shall apply its stated fee waiver or fee reduction policy to the client’s personal financial situation. The poverty level is defined as the poverty guidelines updated periodically in the Federal Register by the U.S. Department of Health and Human Services under the authority of 42 U.S.C. § 9902(2).
An agency shall disclose its fees, as well as its fee waiver and/or fee reduction policy, to the client before providing any information to or obtaining any information from a client, and before beginning a counseling session.
No. An agency may not represent that its fees are federally mandated or required by law, or by the Department of Justice. Approved agencies must provide credit counseling services without regard to a client’s ability to pay and must inform clients that services are available for free or at a reduced rate, based on a client’s ability to pay, before providing any information to or obtaining any information from a client, and before beginning a counseling session.
A fee of less than or equal to $50 is presumed reasonable. If an agency believes its operating costs require fees in excess of $50 per client, the agency may submit to the USTP its request to charge higher fees with supporting evidence. The USTP will consider the fees customarily charged in the industry for similar services when determining the reasonableness of a particular agency’s fees. The USTP also will consider other variables such as geographic location, the types of services the agency supplies, administrative costs, and alternate funding sources.
Yes. Persons other than the client may pay for credit counseling, as long as such payments comply with applicable laws, regulations, and ethical requirements (such as state laws and rules concerning attorney ethics). The agency shall disclose to the client the fee actually charged and paid on the client's behalf for the counseling session. Such payments shall not adversely affect the quality of the services rendered.
Yes. An approved agency may refer a client who wants to enter into a DRP to another USTP-approved agency that offers a DRP. The referring agency must disclose any additional fees that may apply to the referral.
Yes. The third party must be: (a) a USTP approved credit counseling agency, or (b) a service provider that either is specifically covered by the agency’s surety bond, or has a surety bond in a sufficient amount to provide for the safekeeping of the agency’s client funds. Additionally, subject to limited exceptions, the third party must agree, in writing, to USTP oversight and audits.
Yes. An agency must, however, disclose clearly all fees that it charges for a counseling session, including any separate fee for the issuance of a certificate, before providing any information to or obtaining any information from a client, and before beginning a counseling session.
An agency must always provide counseling services, including issuance of the certificate, without regard to a client’s ability to pay.
A certificate may be issued only under the name of the approved agency as it appears on the USTP Web site. This requirement assists the USTP in ensuring that only approved agencies issue certificates.
An agency may request that the USTP list both its legal name and its d/b/a on the USTP Web site, e.g., ABC Counseling Inc., d/b/a XYZ Counseling Services. Both names will appear on the USTP Web site and the credit counseling certificates.
No. Certificates shall be issued to each client as each client completes a counseling session. See also “May a credit counseling agency issue certificates before counseling is complete?” below.
No. Certificates shall be issued to each client only after the client has completed the counseling session.
Advance certificate issuance is improper and jeopardizes the integrity of the counseling process. Such conduct may result in revocation of an agency’s approval to provide counseling in any district.
See “Certificate Generation System - Service Provider’s Guide to Generating Certificates - User Guide for Issuers and Managers,” located at https://ccdecert.ustp.usdoj.gov/ccdecert/.
Yes. The agency may email a completed certificate directly to the client or the client's attorney, or make it available for uploading from a client account on the agency’s Web site.
Lost certificates should be reprinted. To reprint a lost certificate:
- Search the CGS database by the certificate ID number.
- Input the client’s name, as it appeared on the original certificate, in the client name field.
- Select “Save for Reprint” and then “Create Certificate.”
- At the next screen, select “Reprint Certificate.”
- The CGS will generate a reprinted certificate, and the CGS database will note that the new certificate is a reprint and bear the original certificate ID number. All of the information that was on the original certificate remains without alteration, the only difference being the word “DUPLICATE” across the document. A certificate can be reprinted in this manner more than once.
If the original certificate contains erroneous information (such as a misspelled name or incorrect judicial district), cancel the original certificate and issue a new certificate.
- Prepare a new certificate that includes the original date and time of credit counseling, information concerning debt management plans (DMPs) if applicable, the method of delivery, and name and title of the original issuer.
- Include the client’s correct name and correct judicial district.
- The CGS automatically will insert the date of the new certificate.
- When printed, the certificate of completion should contain the same information as the cancelled certificate, except for the corrected name or district (as applicable) and the new certificate issue date.
To cancel the original certificate:
- Search for the certificate by issue date, ID number, or issuer name.
- Select “VIEW” and manually cancel the incorrect certificate by choosing “Cancel a Certificate” in the upper left hand red banner on the screen.
- Insert the certificate number to be cancelled and select “Continue.”
- Select “Yes, Cancel Certificate” to confirm the cancellation.
If the client completed counseling within the last 180 days, you may e mail a request for assistance to email@example.com. Requests for assistance received outside ordinary business hours (9:00 a.m. to 5:00 p.m., Eastern Time, Monday through Friday, excluding holidays) will receive a response the next business day.
Please email firstname.lastname@example.org or contact the Credit Counseling and Debtor Education Help Line, (202) 514-4100, between 8:00 a.m. and 5:00 p.m., Eastern Time, Monday through Friday, excluding holidays) for assistance. Requests for assistance outside ordinary business hours generally will receive a response the next business day.
The agency’s CGS administrator, not the USTP, should be contacted to reset a user password. To reset the password:
- From the CGS Home Screen, the agency’s CGS administrator selects the Agency Accounts tab. The Agency Accounts - View Accounts screen will appear.
- Locate the relevant user account and click Reset Pwd. The “Reset a User Password” screen will appear.
- Type in a new password and confirm.
- Provide the user the new password. Inform the user that, at the next login, he or she will need to change the password to one of his or her own selection.
If a CGS user tries to log in using the wrong password three times, CGS will disable the account and prohibit the user from logging in. If you receive this notification, contact your agency’s CGS administrator, not the USTP, and request that he or she reset your user password.
Agencies shall maintain records for a minimum of two years to enable the USTP to evaluate whether the agency is providing effective counseling and acting in compliance with applicable laws and regulations. All records shall be maintained in either hard copy form or electronically in a format widely available commercially.
The reporting periods are January 1 - June 30 and July 1 - December 31 of each year. An activity report must be submitted within thirty days of the end of each reporting period.
No. You must report credit counseling data and debtor education data on separate forms. You may, however, submit both forms to the USTP at the same time.
This term refers to all other clients counseled by your agency during the same reporting period who were not pre-bankruptcy clients.
This term refers to clients who received counseling at a reduced cost due to financial need. It does not include clients who received a discount because they received counseling as part of a joint counseling session, or individuals who received the benefit of an attorney discount or other similar promotion. Do not include such promotions or discounts in the “reduced cost” column on the new credit counseling activity report.