Credit Counseling ? Get in Line Now to Avoid the Upcoming Rush

Credit counseling is a valuable service for consumers who have trouble managing their finances. A distinctly different service from debt consolidation, credit counseling assists consumers with problem debt by educating them about the basics of money management. Americans really don't get the education they need about how to manage bank accounts, balance checkbooks, or pay bills on time, and credit counseling can provide these services as well as others. By educating consumers, counselors hope to reduce the number of debtors who are forced to file for bankruptcy. Anyone whose financial situation is such that they would benefit from credit counseling may wish to seek it out in a hurry, however. A number of different factors are coming together in such a way that the counseling industry may soon be completely swamped with more clients than it can handle.

Recently passed bankruptcy legislation, designed to reduce the number of consumer bankruptcy filings, will now make credit counseling mandatory as a prerequisite for a bankruptcy petition. Anyone who wishes to file for bankruptcy relief must first demonstrate that he or she has undergone credit counseling during the past six months. By requiring counseling as a condition of debt relief, Congress hopes to reduce or eliminate repeat filers. The counseling industry is preparing for the additional customers now, as the new law is set to take effect in October 2005.

Other factors will weigh heavily on the counseling industry, however. A 2003 law passed by Congress requires credit card companies to raise their minimum payments so that their customers can repay their balances more quickly. This has resulted in the near-doubling of minimum payments, and the average American household, which has a credit card balance of $10,000, will see their minimum monthly payment rise from $200 to $400. Since many households can only afford the minimum payment now, the hike in the minimum due may drive more Americans into counseling and bankruptcy.

The increased reliance upon interest-only mortgages and low-interest adjustable rate mortgages could be a factor, too, if home prices either fall or fail to increase as they have. The sky-high prices in many markets have led homebuyers to purchase more homes than they can really afford, often using mortgages that are themselves riskier than the traditional 30-year loan. Should interest rates rise or housing prices fall, tens of thousands of homeowners will find themselves with loans that either exceed the value of the home or are unaffordable.

Those in the credit counseling industry say that this is a critical time, and the combination of new laws, fragile markets, and credit card industry overhaul could push a number of consumers towards bankruptcy and mandatory counseling. Anyone with problem debt who might benefit from counseling should consider doing so sooner, rather than later, as qualified credit counselors may be quite busy this fall.

©Copyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to personal bankruptcy, debt consolidation and credit counseling, and HomeEquityHelp.com, a site devoted to information regarding mortgages and home equity loans.

---

Debt a Glossary of Terms

Bankruptcy - Having been legally declared financially insolvent. There are... Read More

Debt Relief From Debt Consolidation

If you are up to your neck in debt, there... Read More

Getting a Better Consolidation Loan Secured

If you're looking for the best way to reduce the... Read More

Debt Consolidation: A Way Out?

When you are living paycheck to paycheck and it seems... Read More

Consolidate All Your Debt Into One Monthly Payment

Are you feeling overburdened with debt? Are you paying out... Read More

Debt Elimination 4

Planning For Debt Elimination Without Surplus CashPreviously we looked at... Read More

Debt Consolidation Service In Birmingham

Jane was a fun loving girl from Birmingham, you could... Read More

Thinking Beyond Debt Consolidation Loans

Planning to devise a permanent solution to the problems of... Read More

Financial Aid - When Should I Apply For?

Many different types of financial aid are available to you... Read More

Debt Consolidation Solutions

Millions of Americans are finding it hard to pay their... Read More

Reducing Credit Card Debt

One of the easiest "things" that can happen in life... Read More

Debt Consolidation: How it Works

As long as consumerism flourishes most of us will be... Read More

The Pros and Cons of Debt Consolidation Loans

You are swimming in debt. You have 4 credit cards... Read More

What Is A Debt Consolidation Program?

Debt consolidation programs are devised to get you out of... Read More

Get Out of Debt

It is said that a pet tiger cub can become... Read More

Debt Management - Debt Management Fees

Debt management fees can vary vastly from one company to... Read More

Private Student Loans ? Dispelling The Myths

Private Student Loans ? dispelling the mythsIf savings, grants, scholarships,... Read More

Debt Consolidation ? Discipline is Required if Consolidating with Home Equity

Debt consolidation is a popular topic these days. The average... Read More

Perks and Pitfalls of Debt Consolidation

Whether you want to pursue debt consolidation in order to... Read More

Debt Consolidation

Sometimes life can get on top of you and out... Read More

Are You Buried In Debt?

Are you having a problem paying your bills? Are you... Read More

Dangerous Debt Consolidation Loans

On the surface, debt consolidation loans offer cash-strapped consumers some... Read More

Considering Debt Settlement? What You Should Know

Your credit card bills are stacking up and for whatever... Read More

Debt Consolidation - Free Information About Consolidating Debt

Millions of consumers across the globe are searching for a... Read More

Choosing the Right Credit Counseling Agency for You ? Some Tips

Credit counseling companies come in all shapes and sizes. Whether... Read More

Benefits of a Debt Consolidation Loan

There are many benefits in choosing a Debt Consolidation Loan,... Read More

Debt Consolidation Refinance Loans - A Great Way To Lower Your Bills

For millions of homeowners, refinancing is the perfect way to... Read More

Debt Consolidation Mortgage - Decode Its Apparent Complexity

Someone great once said that 'if it isn't the sheriff,... Read More

Debt Consolidation: Its all in the Planning

If you're like thousands of other people who find themselves... Read More

Is Consolidating Loans Right For You?

Consolidating loans makes sense but only if you can pay... Read More

Getting a Debt Consolidation Loan with Bad Credit

If you've ever tried to get a debt consolidation loan... Read More

Online Debt Consolidation ? Devising Newer Ways for Changing Consumer Trends

Consumers today are getting wiser by the day. They are... Read More

Debt Consolidation Makes Sense Only with Low Interest Rates

Credit that cannot be managed or is not being repaid... Read More