Some credit counseling agencies are claiming to be approved when they aren’t

The recently passed bankruptcy legislation places strict new rules on anyone who wishes to apply for bankruptcy. Some of them make sense; others less so. One of the more confusing aspects of the new law is that it requires anyone who is considering filing for debt relief through bankruptcy to first undergo credit counseling with an approved agency. The idea is that bankruptcy filers can avoid filing again in the future if they first learn some lessons about money management from a professional agency. That’s fine as far as it goes, but the law requires that any such agency be approved by the US Trustees. So far, this organization has been rather slow to approve credit counselors.

In some large cities, only one or two counseling firms has been approved so far. That is making it difficult for those seeking assistance to find suitable help. The lines are long, counselors are busy, and customers are being herded around like cattle as they are handled in large groups, rather than one on one. And worse - some people aren’t even being helped at all, as they are discovering that they are dealing with unapproved agencies.

In a suburb of Boston, a firm known as BK Counselors has been fined by the Massachusetts Attorney General’s office for misrepresenting itself as an approved counselor. Apparently, the company ran advertisements in late September offering “approved” counseling and promising that they could deliver certificates to customers as having completed an approved counseling course.

By advertising that they were approved when they were not, BK Counselors was taking advantage of the misfortune of their customers by claiming to be able to offer needed services that it was not authorized to offer. Customers were signing up and paying for counseling, in good faith, and not getting what they needed in return, which was both counseling and a certificate stating that they had completed their pre-bankruptcy counseling.

What are people with problem debt to do? The last thing you want to do when you are in financial trouble is waste your time and possibly money dealing with people who promise to help you but cannot. And you cannot necessarily trust the advertisements run by the counseling agencies, since they are not necessarily looking out for your best interests. Fortunately, the US Trustees can help. Their Website offers a list of approved credit counseling agencies on a state by state basis. If you are unsure about who can help you in your state, check their site.

Copyright © 2005-2007 by Retro Marketing. All rights reserved.