Consumer: Consumer Credit
Counseling
| ID | Name | Group | Other | Code
Sec |
Cross
Ref | Problem
Referenced | Proposed
Solutions |
NBRC-
0132 | Steven D. Goldstein | President, Credit
Department, Sears Roebuck & Co. | Heard
Brady speak at National Retail Fed'n Credit Mangmnt Advisory
Council | 342(b) | 329(a), 341(d) | As a result of
advertising blitzes in the media, consumers are bombarded with
advertising promoting bankruptcy as a panacea for financial problems,
but are provided little or no help regarding viable
alternatives. | Amend section 342(b) to
require that the clerk of the court, in addition to providing the debtor
with information regarding the alternative chapters under which the
individual is eligible to proceed, must provide the debtor with notice
of the availability of consumer credit counseling service available
within the court's jurisdiction and an explanation that the service
provides a low-cost alternative to bankruptcy filing prior to the date
of any filing. Amend section 329(a) to require the debtor's attorney to
file an affirmation to the court that the attorney provided the debtor
with notice of the availability of consumer credit counseling. Amend
section 341(d) to require the trustee to advise the debtor of the
availability of consumer credit counseling as an alternative to
proceeding with the case and to verify that debtor received notification
of the above. |
NBRC-
0152 | Kenneth L. Robinson | President;
National Ass'n of Federal Credit Unions |
|
|
| Lack of consumer credit
education leads to many bankrutpcies. | Incentives should be established to encourage debtors to seek
consumer credit counseling. Proposed incentives could be faster
deletion of bankruptcy from credit record. |
NBRC-
0274 | Steven D. Goldstein | President, Credit
- Sears, Roebuck and Co.; also on behalf of other National Retail
Federation members |
| 342(b), 329(a), 341(d) |
| Debtors are often unaware of the
alternatives to bankruptcy. | Amend §
342(b) to require that the clerk of the court, in addition to providing
the debtor with information regarding the alternative chapters under
which the individual is eligible to proceed, must provide the debtor
with notice of the availability of consumer credit counseling services
within the court's jurisdiction and an explanation that the service
provides a low-cost alternative to bankruptcy filing prior to the date
of any filing. Also, amend § 329(a) to require the debtor's
attorney to file an affirmation that the debtor was advised about the
availability of consumer credit counseling services, and amend §
341(d) to require the trustee to advise the debtor of the availability
of consumer credit counseling as an alternative to proceeding with the
case. |
NBRC-
0274 | Steven D. Goldstein | President, Credit
- Sears, Roebuck and Co.; also on behalf of other National Retail
Federation members |
| 1325(a) |
| Some courts have increasingly abbreviated the time between the
proposal of a plan at a § 341 hearing and subsequent confirmation
of the plan, leaving little time for creditors to evaluate the plan and
protect their interests before their rights are "cut off
improvidently by impetuous action by the
court." | Amend § 1325(a) to require
a minimum 10-day period between the first § 341(a) meeting and the
date of confirmation of the plan. |
NBRC-
0302 | Brian L. Mc Donnell | President, Navy
Federal Credit Union |
| 521 |
| Bankruptcy is increasingly being
perceived as an "easy way out" for debtors seeking to avoid
responsibility for their actions. In addition, many people no longer
consider bankruptcy to be a financial stigma. It is imperative that
bankruptcy procedures be revised to discourage financial
irresponsibility in today's highly leveraged personal economic
environment. | Amend § 521 to require
debtors who have not completed a personal financial management course in
the previous 180 days to complete appropriate financial counseling and
training within 45 days after filing a petition, without which the
petition will be automatically dismissed. |
NBRC-
0303 | Commercial Law League of America | Commercial Law League of America (CLLA) |
|
|
| The Commerical Law League of
America believes that the following issue should be considered by the
NBRC: Should more be done to provide consumer counseling alternatives to
bankruptcy Should consumer education become part of the bankruptcy
process Who should perform this function | The CLLA believes that these issues should receive top priority
(no additional details are provided). |
NBRC-
0320 | Robert M. Zinman, on behalf of the Bankruptcy
Institute | American Bankruptcy Institute
("ABI") | Numerous position papers,
memoranda and research material |
|
| Consumer credit counseling is beneficial, but it is not available
to debtors in many regions. Consumer education also provides many
benefits, and should be provided by a neutral government agency such as
the Office of the United States Trustee. | The
practice of consumer credit counseling "needs to be specifically
authorized by statute or it may be discontinued by the United States
Trustee program." In addition, the Trustee program should offer
consumer education. If the United States Trustee system is going to be
funded in part by fees from each chapter 13 case, which totals millions
of dollars each year, "perhaps a portion of the fund could be used
to provide consumer [education]." |
NBRC-
0350 | Karen Gross | Professor, New York Law
School |
|
|
| The author provides this "Preliminary Proposal" on
debtor education, in which she discusses issues relating to the possible
organization and funding of debtor education programs. She concludes
that we are wasting an opportunity to provide a true "fresh
start" if we do not eduate debtors as part of the bankruptcy
process. An in-depth discussion of these issues is
provided. | The author recommends that a
volunteer pilot program be established in select regions of the country
that would be available to chapter 7 debtors, while permitting chapter
13 trustees with education programs in effect to continue the
same. |
NBRC-
0470 | Professor Karen Gross | Professor of
Law, New York Law School |
|
|
| Educating consumers about
finance/credit/saving/budgeting/money management/buying and spending
habits. | Preliminary Proposal on Debtor
Education Program Options |
NBRC-
0497 | Earl F. Leitess | Attorney, on behalf
of National Credit Counseling Services, Inc. (NCC) |
|
|
| Author presents, on behalf of
NCC, a "Proposal to the National Bankruptcy Review Commission for
the Education and Counseling of Consumer
Debtors". | "NCC therefore,
believing very strongly in its own mission, recommends for consideration
by the Commission adoption of the enclosed proposal making education and
counseling, by statute, part of the bankruptcy process for
consumers." |
NBRC-
0504 |
Jennie Deden Behles |
Attorney |
|
|
10 |
Author raises a number of questions about the proposal
for Debtor Education: Who will pay Why is it necessary Uniformity of
content and teacher competency Her biggest concern seems to be that it
will be coming to late. "We need to do something to stop the first
bankruptcy, not the second." Author is also not certain that
education is the real answer. |
Author suggests that education needs to be done in the
high schools, colleges, or require creditor grantors to educate when
initial substantial credit is given. Author suggests that a survey of
debtors be done to determine what they think about this situation, what
they think they need. "We seem to be asking everybody but the
person that everyone considers the source of the
problem." |
NBRC-
0509 | Phil G. Davis, II | NationsBank Card
Services |
|
|
| Author writes to explain work of NationsBank's Customer Advocacy
Group, which is designed to deucate customers on how to effectively
manage their budgets and to provide self-help and dignity to assist them
getting through their financial hardship without filing for
bankruptcy. | "We appreciate the hard
work of the Bankruptcy Review Commission and ask for your support in
ensuring that bankruptcy is the last alternative and not the first
option." |
NBRC-
0588 | Edward M. Moldt | Private
citizen |
|
|
| Author's son filed for bankruptcy on advice of friends and a
bankruptcy attorney. Author worked with his son to sell some assets
which was enough to satisfy the debt, all debts were paid, and the
bankruptcy case was withdrawn. Author is upset that no counseling was
provided, and that, even though the case was withdrawn and all debts
paid, his son still has a notation on his credit report that a
bankruptcy was filed. | Provide counseling to
debtors as to options to bankruptcy, and a way to clear credit report
when bankruptcy filing is withdrawn and creditors paid in
full. |
NBRC-
0598 | William R. Mapother | Attorney | Chart of Mapother's Comments
on Draft #1 Proposals; Memorandum on Draft #1 of Consumer Bankruptcy
Working Group by author. |
|
| "In my judgment, the principal and root cause of bankruptcy
is financial ignorance." | "If I am
correct, why doesn't the Commission develop a screening procedure that
would steer the most rehabilitatible consumers away from the bankruptcy
process Why doesn't the Commission recommend financial disincentives
for debtors' lawyers who willy-nilly file bankruptcy petitions rather
than recommend debt counseling by agencies such as CCCS Why doesn't the
Commission require counseling as part of the bankruptcy
process" |
NBRC-
0605 | Kenneth L. Robinson | President,
National Association of Federal Credit Unions
(NAFCU) |
|
|
| NAFCU is concerned by "the lack of financial management
skills apparent in those who file for
bankruptcy." | Debtor education should be
mandatory. |
NBRC-
0654 | William Mark Bonney | Standing Chapter
13 Trustee, Eastern District of Oklahoma |
|
| 10 | Author is in favor of debtor
rehabilitation, but does not want to be responsible for providing the
education. |
"I would hope that the process would allow me to
contract out that service to an organizaation that is much more
qualified to administer it." |
NBRC-
0694 | James H. Cossitt | Attorney |
|
|
| Author agrees that consumer education is needed and laudable, but
questions whether the legal system is the correct mechanism for
providing it. |
|
NBRC-
0696 | Jeff Olson | Collection manager, US
Federal Credit Union |
|
|
| Author sees more bankruptcies
caused by budgeting problems than those of the catastrophic event type.
Education is the key to rehabilitation. "Simply given "an
opportunity to participate" is not
enough." | Author feels that debtor
education must be mandatory, perhaps making discharge contingent upon
the debtor's successful completion of a financial education
program. |
NBRC-
0697 | Jo White | Law Clerk to Judge John C.
Akard, U.S. Bankruptcy Court, Northern Distric of
Texas |
|
|
| Author feels debtor education "would be both admirable and
advantageous to debtors and creditors alike." |
|
NBRC-
0699 | Edith H. Jones |
Bankruptcy Judge |
|
|
| "While we all support the
concept of providing debtor education, it is not necessary to create
federal debtor education." | "...Chapter 13 trustees' education programs should certainly
be allowed to continue, and we should do nothing to discourage the
growing and apparently effective private business of credit
counseling." |
NBRC-
0730 | Thomas C. Leduc | Director of
Regulatory Issues, Michigan Credit Union League |
|
|
| "Consumers all to
frequently find themselves in impossible situations based at leastin
part on a lack of fundamental budgeting skills." In order for
consumer education to be meaningful it must be
mandatory. | "The Task Force recommends
that prior to receiving a discharge in a Chapter 7 or a Chapter 13, the
debtor be required to attend a formal educational program on basic
budgeting, and to demonstrate his proficiency in this area by passing
some sort of test." "As an incentive for the debtor to pursue
a discharge under Chapter 13 rather than Chapter 7, the duration of this
educational program could be longer under Chapter 7 than under Chapter
13." |
NBRC-
0778 | William D. Kirkwood | Accounts Control
Supervisor, Simpson Community Federal Credit Union |
|
|
| Author finds that many of their
members filing for bankruptcy have never had a late payment with them.
He fears they may be using bankruptcy for a "head start"
rather then a fresh start. Author feels that many of these people could
be helped to find a way to solve their financial problems before they
file for bankruptcy, as his credit union has helped many in this way.
Also, many could affro to pay some, if not all, of their debt in Chapter
13 if they had counseling, rather than using Chapter
7. | All debtors should be required to have
financial counseling prior to filing for bankruptcy. |
NBRC-
0787 | Bart DeCamp | VP-Lending, School
Employees Credit Union Clark County |
|
|
| Author feels misinformation is
leading to bankruptcy filings. "Attorneys are not explaining
alternatives to debtors and push bankruptcy as quick and painless. The
mass marketing of bankruptcy attorneys further tilts the scales. This
credit union prides itself in taking time to work through problems with
our members. Unfortunately, we seldom get the
opportunity." | No specific solution
proposed. |
NBRC-
0790 | Ed McKee | Senior Loan Officer/Vice
President, Whatcom Education Credit Union |
|
|
| The credit union provides
counseling to its members and believes it is very
important. | "We believe that counseling
should be mandatory and that bankruptcy attorneys should be required to
do this prior to a bankruptcy filing and to provide proper disclosures
about bankruptcy and what it really means and how the debtor will
affected [sic] by it." |
NBRC-
0803 | Margie Edwards | Collection Manager,
Cowlitz Public Employees Credit Union |
|
|
| "If debtors were advised
that there are more options to financial recovery other than bankruptcy,
cases filed would decrease dramatically." | "It is important for all debtors to have financial
counseling prior to filing bankruptcy." "Credit Unions
should be providing this service for members not bankruptcy
attorneys." |
NBRC-
0805 | Steven R. Wilder | Senior Vice
President, Lending, Horizon Credit Union |
|
|
| "After many years of
counseling not only our own members, but many other people as a
certified financial counselor with our local Consumer Credit Counseling
Service, I have found that counseling can only be effective if the
counselor and the counseled are there
voluntarily." | "We support [the
NBRC proposal that debtors be offered counseling and education in order
to encourage realistic budgeting skills], however, it is unlikely that
mandatory financial counseling will be effective at reducing
insolvency." |
NBRC-
0806 | Jill M. Sturtevant | Assistant General
Counsel, Bank of America |
|
|
|
| "Bank of America strongly supports mandatory debtor
education as a condition of receiving discharge." |
NBRC-
0807 | Richard T. Wargo, Jr., Esq. | Director,
Compliance & Information, Pennsylvania Credit Union League &
Pacul Services, Inc. |
|
|
|
| "All Chapter 7 and 13 debtors should complete education
programs as a prerequisite to filing bankruptcy. Any effective program
must stress personal responsibility and budgeting. Such programs should
also encourage saving." |
NBRC-
0846 | Paula E. Langguth | Author, Bounce Back
From Bankruptcy, Pellingham Casper Communications,
LLC. |
|
|
| Author heartily agrees with the proposal to make debtor education
available to all who seek bankruptcy protection. | "I would add completion of the debtor education program as
something that could be favorably listed on the credit reports of
Chapter 7 debtors, as well as Chapter 13 debtors." |
NBRC-
0848 | James Kirk | Chairman, Michigan Credit
Union League Bankruptcy Task Force |
|
|
| "...we firmly believe that
the best way to reduce bankruptcy filings is consumer
education." | "...we believe the
Bankruptcy Code must require debtors to complete a basic budgeting
educational program before obtaining a discharge." |
NBRC-
0864 | Jeff Sheets | Consumer Credit
Counseling Service |
|
|
| Author writes on own behalf and not CCCS, but feels that CCCS
might be of help in bankruptcy situations because they could advise
clients who could not be helped by their Debt Management Program about
which type of bankruptcy would be most beneficial to them. Author feels
that attorneys do not do this because Chapter 7 is "cleaner"
and does not require as much paperwork as Chapter
13. | See above. |
NBRC-
0870 | Joe Lee | Chief Judge, U.S. Bankruptcy
Court, Eastern District of Kentucky | Copy of
article "The Counseling of Debtors in Bankruptcy Proceedings",
by Hon. Joe Lee. |
|
| "I have long been an
advocate of counseling for debtors, particularly those in chapter 13,
but we have not had much success in sustaining experimental programs of
this nature." "Debtors need counseling and reference to
community services with respect to a panaply of problems that are not
really financial in nature but appear so merely because debtors have
borrowed money in an attempt to alleviate or deal with such
problems." | "In my view, if
counseling is to be provided, it should be contracted out to bona fide
social work agencies and not restricted to financial education
programs." |
NBRC-
0874 | Robin L. Lamb | Author writes on behalf
of the Board of Directors, Staff and Credit Committee of Allsteel
Employees' Credit Union. |
|
|
| "Through combined education
from both the bankruptcy court and financial institutions maybe fewer
debtors would file." | "Education
for debtors should be mandatory prior to the petition
stage." |
NBRC-
0883 | Eugene R. Wedoff | U.S. Bankruptcy
Judge, Northern District of Illinois |
|
|
| Author approves the voluntary
debtor education program and feels it will be seen as a benefit of
bankruptcy and not a punishment, a perception which can be enhanced by
making sure there is no additional cost to the debtor for the
program. | Do not charge debtors for the
debtor education program. Also, limit judicial power to compel debtor
education. |
NBRC-
0884 | Norma Hammes | President, National
Association of Consumer Bankruptcy Attorneys |
|
|
| "Debtors are universally
humiliated and traumatized by filing bankruptcy, and to require them to
submit to the further humiliation of attending "debtor's
school" like "traffic school" is unjustifiable. On the
other hand, many debtors will avail themselves of a budget counseling
service as long as it is voluntary." | "Debtor education should be voluntary rather than
mandatory." |
NBRC-
0923 | Toby L. Rosen | Standing Chapter 13
Trustee |
|
|
| This appears to be a written copy of a presentation to the
Commission by the author on the topic of debtor
education. | Author proposes that for a debtor
education program to be effective, one must know the debtor and address
his problems. He then presents a method of educating the debtor within
the framework of the bankruptcy process, as well as through a formal
education component. |
NBRC-
0925 | C. Michael Stilson | Bankruptcy Judge,
Northern District of Alabama, Western Division |
|
| 11 | Author feels that the
"substantial" changes proposed to the Bankruptcy Code are not
necessary, and that remedies already exist for most of the problems
addresed by the Consumer Bankruptcy Working Group. Author addresses
each proposal of the Working Group. |
With regard to debtor education, author notes that
"[t]here are several very good debtor educaton prpograms currently
in existence in Chapter 13 trustees' offices. An economical debtor
education plan could be developed from these existing plans.
Authorizing judges to require participation on a case-by-case basis
would be helpful." |
NBRC-
0992 | Kay L. Campbell | Compliance Officer,
McDonnell Douglas West Federal Credit Union |
|
|
| "To assume that consumers
that find themselves in this situation [bankruptcy] is due strictly to
not understanding how to handle their finances, would be an over
simplification of the problem. There are other factors that need to be
addressed if habits are to be changed." "Counseling could be
a viable option since Consumer spending habits are often driven by
psychological or emotional issues." | Debtors should be required to attend "some sort of education
program and/or counseling before filing bankruptcy." |
NBRC-
1000 | Bruce Mallory | Vice President of
Financial Services, SELCO Credit Union |
|
|
| Many debtors can avoid
bankruptcy if they receive financial counseling prior to filing. The
optionality of the proposed financial education program reduces it to a
meaningless suggestion. | "I would
recommend to the Commission that a mandatory screening procedure be
implemented in order to rescue rehabilitatible consumers from
bankruptcy. The Commission might recommend financial disincentives for
debtors' lawyers who indifferently file bankruptcy petitions without
recommending debt counselings." |
NBRC-
1016 | Richard T. Wargo | Compliance and
Information, Pennsylvania Credit Union League & Pacul Services,
Inc. |
|
|
|
| Debtor education should be
mandatory. "The curriculum could address the debtor's right and
opportunity for a fresh start. The curriculum should also stress thrift
and the responsible use of credit." |
NBRC-
1042 | Timothy A. De Both | Collections
Manager for Community First Credit Union (CFCU) |
|
|
| Author wonders who is teaching
people life management skills. Making debtor education optional makes
it worthless. "The Commission should work more to balance
bankruptcy between the debtors and creditors." | A balance between debtors and creditors "could be better
addressed if you [the Commission] would stick to education,
rehabilitation, and repayment under Chapter 13." |
NBRC-
1043 | Darren W. Hurst | Collection Officer,
Salt Creek Valley Bank |
|
|
| Debtors do not know how to
manage their money. | Educate debtors in how
to deal with money. |
NBRC-
1081 |
Karen Gross et al. |
Professor of Law, New York Law School (this is a form
letter with no return address) |
15 copies of the second page of the letter with
different counter-signatures. |
|
|
Author sends a form letter which she has signed which
also has a second signature line which has been signed by different
people. She sends a copy of each second page with the different
signature. The letter seeks to emphasize the importance of post-filing
debtor education. Author emphasizes three aspects of such a program:
1) implementation of such a program is a worthwhile goal; 2) such a
program can best be achieved by taking all viewpoints into account; 3) a
pilot program should first be established. |
"...we encourage the Commission to include these
three points in its final report..." |
NBRC-
1113 | Edward J. Flynn | citizen |
|
|
| Author questions the practices of credit reporting agencies with
regard to bankruptcy filing information. | None |
NBRC-
1127 |
Grady Cash |
Center for Financial Well-Being |
|
|
|
"One of the major obstacles to address in
bankruptcy is motivating the consumer to change spending behaviors
before finances get out of control." Author gives information
about the Center for Financial Well-Being which provides workshops which
integrate modified adult behavioral techniques within financial
education workshops. |
Use author's training program to motivate consumers
before financial problems occur. |
NBRC-
1164 | Barbara J. Sellers | Bankruptcy Judge,
Southern District of Ohio, Eastern Division |
|
|
| "...the problem with the
prepetition credit counseling mentioned in the proposal is taht these
programs genereally lack the power or authority to stop the accrual of
interest on unsecured debt. This limitation causes many debtors to
emerge from these programs in worse financial condition than when they
began." | "That directive [concering
perpetition credit counseling] needs to be very clearly thought through
before it should be required." |
