11 U.S.C. § 111 : US Code - Section 111: Nonprofit budget and credit counseling agencies; financial management instructional courses

Search 11 U.S.C. § 111 : US Code - Section 111: Nonprofit budget and credit counseling agencies; financial management instructional courses

(a) The clerk shall maintain a publicly available list of -
(1) nonprofit budget and credit counseling agencies that
provide 1 or more services described in section 109(h) currently
approved by the United States trustee (or the bankruptcy
administrator, if any); and
(2) instructional courses concerning personal financial
management currently approved by the United States trustee (or
the bankruptcy administrator, if any), as applicable.
(b) The United States trustee (or bankruptcy administrator, if
any) shall only approve a nonprofit budget and credit counseling
agency or an instructional course concerning personal financial
management as follows:
(1) The United States trustee (or bankruptcy administrator, if
any) shall have thoroughly reviewed the qualifications of the
nonprofit budget and credit counseling agency or of the provider
of the instructional course under the standards set forth in this
section, and the services or instructional courses that will be
offered by such agency or such provider, and may require such
agency or such provider that has sought approval to provide
information with respect to such review.
(2) The United States trustee (or bankruptcy administrator, if
any) shall have determined that such agency or such instructional
course fully satisfies the applicable standards set forth in this
section.
(3) If a nonprofit budget and credit counseling agency or
instructional course did not appear on the approved list for the
district under subsection (a) immediately before approval under
this section, approval under this subsection of such agency or
such instructional course shall be for a probationary period not
to exceed 6 months.
(4) At the conclusion of the applicable probationary period
under paragraph (3), the United States trustee (or bankruptcy
administrator, if any) may only approve for an additional 1-year
period, and for successive 1-year periods thereafter, an agency
or instructional course that has demonstrated during the
probationary or applicable subsequent period of approval that
such agency or instructional course -
(A) has met the standards set forth under this section during
such period; and
(B) can satisfy such standards in the future.
(5) Not later than 30 days after any final decision under
paragraph (4), an interested person may seek judicial review of
such decision in the appropriate district court of the United
States.
(c)(1) The United States trustee (or the bankruptcy
administrator, if any) shall only approve a nonprofit budget and
credit counseling agency that demonstrates that it will provide
qualified counselors, maintain adequate provision for safekeeping
and payment of client funds, provide adequate counseling with
respect to client credit problems, and deal responsibly and
effectively with other matters relating to the quality,
effectiveness, and financial security of the services it provides.
(2) To be approved by the United States trustee (or the
bankruptcy administrator, if any), a nonprofit budget and credit
counseling agency shall, at a minimum -
(A) have a board of directors the majority of which -
(i) are not employed by such agency; and
(ii) will not directly or indirectly benefit financially from
the outcome of the counseling services provided by such agency;
(B) if a fee is charged for counseling services, charge a
reasonable fee, and provide services without regard to ability to
pay the fee;
(C) provide for safekeeping and payment of client funds,
including an annual audit of the trust accounts and appropriate
employee bonding;
(D) provide full disclosures to a client, including funding
sources, counselor qualifications, possible impact on credit
reports, and any costs of such program that will be paid by such
client and how such costs will be paid;
(E) provide adequate counseling with respect to a client's
credit problems that includes an analysis of such client's
current financial condition, factors that caused such financial
condition, and how such client can develop a plan to respond to
the problems without incurring negative amortization of debt;
(F) provide trained counselors who receive no commissions or
bonuses based on the outcome of the counseling services provided
by such agency, and who have adequate experience, and have been
adequately trained to provide counseling services to individuals
in financial difficulty, including the matters described in
subparagraph (E);
(G) demonstrate adequate experience and background in providing
credit counseling; and
(H) have adequate financial resources to provide continuing
support services for budgeting plans over the life of any
repayment plan.
(d) The United States trustee (or the bankruptcy administrator,
if any) shall only approve an instructional course concerning
personal financial management -
(1) for an initial probationary period under subsection (b)(3)
if the course will provide at a minimum -
(A) trained personnel with adequate experience and training
in providing effective instruction and services;
(B) learning materials and teaching methodologies designed to
assist debtors in understanding personal financial management
and that are consistent with stated objectives directly related
to the goals of such instructional course;
(C) adequate facilities situated in reasonably convenient
locations at which such instructional course is offered, except
that such facilities may include the provision of such
instructional course by telephone or through the Internet, if
such instructional course is effective;
(D) the preparation and retention of reasonable records
(which shall include the debtor's bankruptcy case number) to
permit evaluation of the effectiveness of such instructional
course, including any evaluation of satisfaction of
instructional course requirements for each debtor attending
such instructional course, which shall be available for
inspection and evaluation by the Executive Office for United
States Trustees, the United States trustee (or the bankruptcy
administrator, if any), or the chief bankruptcy judge for the
district in which such instructional course is offered; and
(E) if a fee is charged for the instructional course, charge
a reasonable fee, and provide services without regard to
ability to pay the fee.
(2) for any 1-year period if the provider thereof has
demonstrated that the course meets the standards of paragraph (1)
and, in addition -
(A) has been effective in assisting a substantial number of
debtors to understand personal financial management; and
(B) is otherwise likely to increase substantially the
debtor's understanding of personal financial management.
(e) The district court may, at any time, investigate the
qualifications of a nonprofit budget and credit counseling agency
referred to in subsection (a), and request production of documents
to ensure the integrity and effectiveness of such agency. The
district court may, at any time, remove from the approved list
under subsection (a) a nonprofit budget and credit counseling
agency upon finding such agency does not meet the qualifications of
subsection (b).
(f) The United States trustee (or the bankruptcy administrator,
if any) shall notify the clerk that a nonprofit budget and credit
counseling agency or an instructional course is no longer approved,
in which case the clerk shall remove it from the list maintained
under subsection (a).
(g)(1) No nonprofit budget and credit counseling agency may
provide to a credit reporting agency information concerning whether
a debtor has received or sought instruction concerning personal
financial management from such agency.
(2) A nonprofit budget and credit counseling agency that
willfully or negligently fails to comply with any requirement under
this title with respect to a debtor shall be liable for damages in
an amount equal to the sum of -
(A) any actual damages sustained by the debtor as a result of
the violation; and
(B) any court costs or reasonable attorneys' fees (as
determined by the court) incurred in an action to recover those
damages.