Bankruptcy: What It's Like to File Now: MMI Provides Insight Into Pre-Bankruptcy Counseling.

HOUSTON -- Today marks the one-year anniversary of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the Act). The Act made sweeping changes to the former bankruptcy law and is well known to the year's bankruptcy filers who had to navigate its many new requirements. Approximately 263,000 consumers filed personal bankruptcy in the first two quarters of 2006.

While the number of bankruptcy filings has dipped since the Act took effect, the core causes of financial problems still exist. Low savings rates, high debt levels and increased borrowing costs challenge consumers more than ever. "It is imperative that consumers seek assistance at the first sign of financial trouble," said Cate Williams, vice president of financial literacy for Money Management International. "Options to bankruptcy do exist and with help from a nonprofit organization, consumers may be able to successfully manage their debts and avoid bankruptcy," added Williams.

For consumers choosing bankruptcy, the Act mandates financial counseling and education. Before filing for bankruptcy, consumers are required to complete a pre-filing counseling session; and before receiving a bankruptcy discharge, debtors are required to complete "an instructional course concerning personal financial management." These provisions are designed to help provide debtors in bankruptcy with the skills and tools needed to avoid future financial problems.

While the experts at Money Management International (MMI) would ideally like to counsel consumers before financial problems become severe, they support Congress' efforts to ensure that consumers will be better informed about the bankruptcy process. "The bill's financial literacy provisions represent a positive and significant consumer benefit," said Williams. To make the most of this benefit, Williams offers potential filers the following tips to help them choose a quality bankruptcy counseling agency:

* Verify that your counseling agency of choice is approved by the Executive Office for U.S. Trustees to deliver the necessary counseling and education. A list of approved agencies can be found at www.usdoj.gov/ust/eo/bapcpa/.

* Check that the organization has the capacity to help you to better your overall financial situation through continuing counseling and education.

* Determine if the organization has the systems in place to effectively assist you in the timeframe you desire. For example, ask if the organization offers on-line counseling and education around the clock.

* Consider the organization's commitment to quality. Ask if the organization is a member of the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Verify that they are accredited by an independent third party organization, such as the Council on Accreditation (COA).

About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit-counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. Services are available in English or Spanish. To learn more, call 800-762-2271 or visit www.moneymanagement.org.