Credit Counseling – Not So Bad After All

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.

Call the Maryland Bankruptcy Center today for more information about how to get started on filing personal consumer bankruptcy in Maryland, Chapter 7 and Chapter 13.  We are Maryland Bankruptcy Lawyers who assist people in filing bankruptcy.