June 15, 2006
Is credit counseling a waste of time?
The new bankruptcy law that took effect last fall, makes credit counseling an important step before a person can file for bankruptcy. to review his finances and consider repayment options. However, there is one problem with this provision: By the time many consumers get counseling, it's way too late as they are already in dire financial straits, with debts far outweighing income, and they have no choice but to file for bankruptcy. Montereyherald.com reports:
"Early on, most of the pre-bankruptcy counseling is not especially useful because it's only occurring for people right before they go into bankruptcy," said Steve Bartlett, president of an industry association called the Financial Services Roundtable. "The flaw is that the bankruptcy counseling is only occurring at the end of the process when you have little option. That's not what we wanted or the agencies wanted."
Read more: Credit counseling falling short
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