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Only Sex Appeal and the U.S. Congress Can Sell These Services

By Cathy Moran

Selling pointless bankruptcy counseling

 

Russell A. DeMott is a friend of mine and  a Charleston, South Carolina bankruptcy and foreclosure defense lawyer .   He likes hot women; don’t ask why he wrote this piece for me at the Soapbox.

 

Hot Women and Bankruptcy?

What do hot women have to do with bankruptcy?  Selling credit counseling and debtor education “services” required by the Bankruptcy Code.

I’m very pro-hot woman!

Let’s get something straight right up front: I have nothing against hot women.

When I go to conferences, either here in South Carolina or in other places, there is never a lack of attractive women manning—or should I say womaning?—displays touting their company’s credit counseling and debtor education programs.

In case you didn’t know, credit counseling is required prior filing bankruptcy.  Think of it as your ticket into the bankruptcy system.  No ticket, and you can’t get on board.

Debtor education is required to get out of the system—at least if you want your debts discharged.  Think of it as your ticket out of bankruptcy.

The courses are stupid, but…

Both counseling sessions are required under the 2005 Bankruptcy Code.  Both—particularly the pre-filing credit counseling course—could be poster children for some of the stupid, pointless, requirements of the new code.

As my colleague at Bankruptcy Law Network, Oregon bankruptcy lawyer Kent Anderson, recently noted:

Credit counseling itself is an enormous waste of both money and time.  It is often described as a ‘speed bump’ in the road to bankruptcy relief.  In the more than six years since the implementation of this requirement I have not had a single client change their mind about a bankruptcy filing due to the credit counseling they attended.  However, they have spent thousands of dollars paying for this worthless and wasteful ‘service.’

And, of course, these silly requirements have spawned a new industry to provide these “services.”  Now you know why I use the quotations marks.

The best solution

You can’t get out of it, but you can do it cheaply.

The Tides Center, a non-profit funding numerous projects, deserves a high-five (or fist bump?) for realizing that this requirement hurts the poor, as well as blue-collar debtors.   The Tides Center has funded credit counseling services for only $5.   Several large law firms and other businesses  support this project.  Thanks to these fine folks, you can get this needless requirement out of the way for only $5.

And for debtor education, Ypside.org  will provide debtor education for only $15.  Thanks to these organizations, you get your ticket in and your ticket out for only $20.

That’s more than these “courses” are worth, but I applaud these two providers for making this requirement as inexpensive as it can be.  If you use other providers, you’ll pay up to $100 for both courses.  Ypside also publicly supports ending these counseling requirements, which I also appreciate.

“But what about the hot women?” you say.  Again, I’m not against hot women. I’d just like to see a day when they sell something useful—cars, computers, insurance, anything but these pointless courses.

Until then you now know where to go to meet these silly requirements.

Cathy reminds you that each federal judicial district approves providers of these services for cases filed in their court.  Make sure that you use an approved vendor for the district in which you are filing.

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Filed Under: How bankruptcy works

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Comments

  1. Don Petersen says

    February 20, 2012 at 2:28 pm

    Unfortunately, many debtors pay “counseling” providers far more than your clients do. Debtors have told me that the pre-bankruptcy counseling is of little (if any) value. Thanks for reminding debtors that that their are often more realisticly priced counseling services available in many districts.

  2. Mitchell Goldstein says

    February 21, 2012 at 1:48 pm

    I never thought about it this way, but it makes sense. Why else would anyone pay $50 for each course when they get little or nothing out of it?

Trackbacks

  1. Credit Counseling Before Bankruptcy More Than a Roadbump | Free Bankrupty Help says:
    February 20, 2012 at 3:12 am

    […] Several large law firms and other businesses support this project. … Follow this link: Credit Counseling Before Bankruptcy More Than a Roadbump ← Considering Bankruptcy? Critical Early Warning […]

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About The Soapbox

You’ve arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said “try”).

Here, I allow myself to tell stories and express strong opinions. We dig deeper into how to consider bankruptcy and navigate a bankruptcy case.

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Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

How To Pay For Bankruptcy When You’re Flat Broke

One of the cosmic ironies of our legal system is that it costs money to file bankruptcy. Bankruptcy gets you out of debt only if you have the money to file. The costs of bankruptcy include the filing fee collected by the court; the required credit counseling; and, if you're smart, an experienced lawyer to make sure … Read more

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