Nearly 90% of Credit Counseling Agencies Approved to Provide Counseling Under the New Bankruptcy Law Are NFCC Members.

SILVER SPRING, Md. -- The National Foundation for Credit Counseling (NFCC) announced today that nearly 90 percent of the nonprofit budget and credit counseling agencies who have received approval from the Executive Office for U.S. Trustees (EOUST) to provide pre-filing counseling under the new bankruptcy law are members of the NFCC. In all, 36 of the 41 approved agencies are NFCC members.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which will take effect on October 17, 2005, mandates that individuals filing for bankruptcy must undergo counseling prior to filing for bankruptcy and a financial education course prior to the discharge of debts.

The EOUST began accepting applications from nonprofit credit counseling agencies in July 2005.

"The fact that nearly 90 percent of the nonprofit credit counseling agencies that have received EOUST approval to provide pre-filing counseling are members of the NFCC speaks volumes to the high standards and quality business practices of our more than 50-year-old organization," said Susan C. Keating, President and CEO of the NFCC. "Equally important, however, we are pleased that the value of a financial education and a thorough understanding of bankruptcy now has been enshrined into a law. This creates a unique opportunity for NFCC member agencies to reach more consumers and make a difference by providing the tools to manage their finances well into the future."

Consumers undergoing pre-filing counseling with an NFCC member agency should expect the session to last from 60 to 90 minutes. Individuals will undergo a thorough budget analysis and be fully informed about the bankruptcy process, potential alternatives to bankruptcy and the consequences of filing for bankruptcy.

According to NFCC, the objective is to educate consumers that bankruptcy is not a free ride. It has real consequences, and consumers have a right to know both the plusses and minuses. By providing a more thorough overview of bankruptcy, consumers are in a better position to give "informed consent" prior to moving forward with the filing.

National Foundation for Credit Counseling

Impact of Bankruptcy Reform Credit Counseling Provisions on Consumers

--For the first time in history, a federal law includes provisions for financial counseling and education.

--Included in the recently enacted Bankruptcy Reform Law is the provision that consumers be fully informed about the bankruptcy process, alternatives to bankruptcy and the potential consequences of filing for bankruptcy. Once they have all the facts, consumers are better able to make informed, financial decisions.

--The new law will also require debtors, prior to receiving a bankruptcy discharge, to complete a financial management instructional course. Providing consumers in bankruptcy with education and training, as well as the necessary skills and tools, will enable them to better prepare for their financial future and to avoid future financial problems.

--The agency approval process developed by the Executive Office for U.S. Trustees (EOUST) reflects a clear and strong commitment to ensuring that consumers receive counseling and education that are substantive and of the highest quality.

--As of October 12, 2005, nearly 90 percent of the nonprofit budget and credit counseling agencies who have received approval from the EOUST to provide pre-filing counseling under the new bankruptcy law are members of the NFCC. In all, 36 of the 41 approved agencies are NFCC members.

--The EOUST approval process recognizes NFCC certified counselors as being fully qualified and experienced as supervisors, instructors and counselors trained to provide services that focus on the needs of consumers facing financial problems.

NFCC, founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. NFCC's mission is to set the national standard for quality credit counseling, debt reduction services and education for financial wellness, through its member agencies. With more than 1,000 community-based offices nationwide, NFCC members help over a million households annually. For free and affordable confidential advice through an NFCC member, call 1-800-388-2227, or visit www.nfcc.org.