New Study Suggests Credit Counseling is Beneficial for Bankruptcy Filers
We've all heard clients complain about the pre-filing credit counseling requirement and ask why they have to jump through this hoop when they know they're going to end up filing for bankruptcy anyway. In many cases, we may be inclined to agree: a client facing foreclosure or repossession is in a hurry, and we know that there aren't any other realistic options on the table.
However, a new study released by the University of Illinois Department of Agriculture and Consumer Economics and MMI suggests that the credit counseling requirement does benefit those bankruptcy debtors after the fact. The study sought to measure two general areas: change in knowledge and change in behavior.
The educational value, based on pre-test and post-test scores, seems clear: the average score jumped from 77.1% to 85.9%. And an overwhelming percentage of participants surveyed reported that they felt more knowledgeable about their options and more confident in their ability to make financial decisions after the credit counseling briefing.
The other conclusion drawn by researchers--that credit counseling impacts future behavior--is less clear. That conclusion rests on participant reactions to a list of financial behaviors pre- and post-counseling. However, the pre-briefing questions related to actual current behavior, whereas the post-briefing survey asked which behaviors participants planned to implement. Good intentions being what they are, we'll need to see some data on actual post-briefing behavior before drawing any firm conclusions on that point.
The problem with the credit counseling is that most Debtors look at this as simply an task that they must do and in fact retain very little.
Sure, it can be (somewhat) inconvenient to have to take this class. But for those clients bent on rushing to file bankruptcy, this is a good opportunity to slow down and think about things, even if the benefit doesn't kick in until after discharge.
good study for bankruptcy problems.I have experienced also almost filing bankruptcy and by the help of expert attorney in Cincinnati I've understand a lot in solving it.Best solution were given and suggestion provided in me.
Great information in regards to Credit counseling. I'm not sure if the article really addressed this but most states require that an individual that is filing for Chapter 7 seek out a credit counseling program.