Credit Counseling - Congress Offers No Details in New Law

The recently passed Bankruptcy Maltreatment and Consumer Protection Act was hailed as a discovery in bankruptcy law. Passed with bipartizan support in United States Congress and signed enthusiastically by President Bush, the law makes sweeping changes in debt law and will do it much more than hard for debtors to have got their duties swept away by the courts. A major demand of the new law will necessitate that anyone considering filing for bankruptcy to first experience credit counseling. The thought is sound; anyone with problem debt can probably profit from some treatments about money management. There’s just one problem – United States Congress failed to include any inside information in the measure about what, exactly, represents credit counseling.

The credit counseling industry, which includes for-profit as well as non-profit-making organizations, have been through some hard modern times lately. The Federal Soldier Trade Committee have got been investigating some firms that have claimed to be non-profit-making but were actually steering their clients into costly debt consolidation programs run by for-profit affiliates. These high-profile cases have got left a dark cloud wall hanging over the industry. With the new statute law set to take consequence this October, many consumers have got inquiries about the nature of the counseling requirements. Who will pay for it, and what kinds of fees are acceptable? The measure doesn’t state whether the debtors themselves or their creditors will pay the counseling fees or how much the service should cost. The law only states that the fees must be “reasonable” and that the services should be available even if the debtor cannot afford to pay. The idea of being forced to supply counseling to clients who cannot wage have justifiably angered the counseling industry. Even non-profit-making agencies have got overhead and typically charge some kind of fee.

Who measure ups as a counselor? As “credit counselor” is a indeterminate term with no existent legal meaning, anyone might be able to put a mark on a edifice and phone call himself or herself a credit counselor. Are that what United States Congress had in mind? The United States Trustee Program is in charge of making all of these determinations, and the section is said to be compiling a listing of “approved” agencies. Presumably, the Trustees will also be examining these other issues and providing guidelines before the law takes effect. In the meantime, both debtors and counselors are concerned as thousands of Americans will be seeking advice for their debt problems come up October. By then, with a small luck, consumers with problem debt will have got some manner of knowing whom they should name before filing for bankruptcy.