NEW BURDENS BUT FEW BENEFITS: AN EXAMINATION OF …

NEW BURDENS BUT FEW BENEFITS: AN EXAMINATION OF THE

BANKRUPTCY COUNSELING AND EDUCATION REQUIREMENTS IN

MASSACHUSETTS

June 2007

77 Summer Street, 10th Floor Boston, MA 02110 (617) 542-8010



NEW BURDENS BUT FEW BENEFITS: AN EXAMINATION OF THE BANKRUPTCY COUNSELING AND EDUCATION REQUIREMENTS IN MASSACHUSETTS

Written by:

Deanne Loonin John Rao

Mallory SoRelle

National Consumer Law Center June 2007

Acknowledgments:

The views expressed in this report are those of the authors alone and do not necessarily reflect the views of its funders or those who provided editorial review. This report was developed with support from The John H. and H. Naomi Tomfohrde Foundation and the George H. and Jane A. Mifflin Memorial Fund. The authors thank Travis Plunkett, Legislative Director with Consumer Federation of America and Sheryl Serreze and Hale and Dorr Legal Services Center of Harvard Law School for their valuable support and comments. At NCLC, thanks to Carolyn Carter for substantive and editorial advice and Svetlana Ladan for technical support. We also thank all of the credit counseling agency staff and directors and leaders from the National Foundation for Credit Counseling and Association of Independent Consumer Credit Counseling Agencies for sharing their insights and for giving us access to their briefings and courses. We could not have prepared this report without their assistance. Very special thanks to the consumers who were willing to share their experiences with us.

TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................1 INTRODUCTION ............................................................................................................ 6 METHODOLOGY ........................................................................................................... 6

RULES AND REQUIREMENTS FOR COUNSELING AND EDUCATION ........... 7 EVALUATING THE COUNSELING AND EDUCATION REQUIREMENTS ....... 8 RESULTS OF NATIONAL CONSUMER LAW CENTER INVESTIGATION........ 9 COUNSELING AND EDUCATION ...............................................................................18 SPOTLIGHT ON COUNSELING BRIEFINGS: CONTENT AND EFFECTIVENESS ........................................................................................................................................... 20 INTRODUCTION ........................................................................................................ 20 SUBSTANCE OF BRIEFINGS ................................................................................... 21 KEY CONCERNS WITH COUNSELING BRIEFINGS ................................................ 21 LACK OF EFFECTIVE BANKRUPTCY ALTERNATIVES .................................... 25 RECOMMENDATIONS TO IMPROVE COUNSELING BRIEFINGS .................... 32 SPOTLIGHT ON EDUCATION: CONTENT AND EFFECTIVENESS ...................... 34 CONTENT OF EDUCATION COURSES .................................................................. 34 RESULTS OF NATIONAL CONSUMER LAW CENTER INVESTIGATION........ 35 IS EDUCATION WORTHWHILE? ............................................................................ 39 RECOMMENDATIONS TO IMPROVE EDUCATION COURSES ......................... 40 CONCLUSION................................................................................................................. 41

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