- The Washington Times - Tuesday, October 4, 2005


The Justice Department temporarily waived a provision of a tough new bankruptcy law in order to aid people filing for bankruptcy in Louisiana and southern Mississippi because of Hurricane Katrina.

The department’s U.S. Trustee Program said yesterday that, for the time being, applicants in those areas would not have to undergo credit counseling before they file.

Some observers had predicted that the new law, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, would produce hardships for the victims of recent hurricanes.

The law requires that any debtor who files for bankruptcy after Oct. 17 must undergo credit counseling within six months before they file for bankruptcy.

The law also authorizes U.S. Trustees to approve credit-counseling agencies that meet the law’s criteria.

U.S. Trustees, who oversee private trusts and promote and maintain efficiency in the bankruptcy system, are authorized by the new law to waive the counseling requirement in any judicial district where the existing counseling agencies are not reasonably able to provide adequate services to filers.

The U.S. Trustee for Region 5 made this determination for the Eastern, Middle and Western judicial districts of Louisiana and the Southern district of Mississippi.

The overall Trustee program also announced approval of 41 credit-counseling agencies in all federal districts for which Trustees are responsible.

The list of approved credit counseling agencies is posted at the Trustees’ Web site: www.usdoj.gov/ust.

More agencies will be added to the list as they are approved.

So far, 13 offices have been given approval to provide counseling for Louisiana filers, but none is located in Louisiana.

They say telephone and Internet counseling is available where in-person counseling is not.

Five offices have been approved to provide counseling in southern Mississippi, although none are located in Mississippi.

The program is not responsible for overseeing bankruptcy cases filed in Alabama or North Carolina.

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