How to Become Approved to Provide Credit Counseling for Bankruptcy Courts
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made credit counseling mandatory for all consumer bankruptcy debtors. By law, this counseling must come from a nonprofit provider approved by the U.S. Trustee Program, an office of the Department of Justice. For-profit businesses can register as providers of personal financial management instruction. But, just because an organization is not-for-profit doesn't mean it works for free or that it's employees aren't paid.
Other People Are Reading
Instructions
-
-
1
Receive 501(c)(3) status. To become approved to provide credit counseling, you must create a business organization (not necessarily a corporation) and apply for, and receive, a nonprofit designation from the Internal Revenue Service under section 501(c)(3) of the tax code. Part of this process will be stating the purpose of the business, which should be educational in nature.
-
2
Complete application. The application for approval as a nonprofit budget and credit counseling agency has nine parts. It requires a federal tax ID, description of the organization's tax-exempt status and purpose, description of the qualifications of the counselors, and a showing of compliance with rules about client funds. The application is available in the Resources section below.
-
-
3
Complete appendices. In addition to the application form, your application package should contain all five supplemental forms, referred to as appendices a through e. These provide more details about the information required in the application.
-
4
Send by overnight mail. Once the application documents are complete, make at least one copy for your records and send the original by overnight mail to the Executive Office of U.S. Trustees at the address below:
Credit Counseling Application Processing
20 Massachusetts Avenue, NW
8th Floor
Washington, DC 20530
-
1
Tips & Warnings
It is estimated that a first time application will take ten hours to complete on average. If approved, your organization will receive a provisional six month probationary period. The application must be resubmitted between 60 and 45 days from the end of this period for re-approval, and annually after that.
