Credit counseling, continued

Here’s what New York Law School Professor Karen Gross has to say about the whole credit-counseling situation.  Thanks to her for her informed and thoughtful input. 

The credit counseling industry is truly in flux.
Some are good (even better than good) and some are weak. The IRS has even
gotten into the game and is taking away the Section 501 ( c)(3) status of
some non-profit counselors. The old distinction (for profit/non-profit) does
not resolve the issue. Moreover, consumers cannot tell, really, the good
from the bad. Even approval by of the Office of the United States Trustee
for counseling before bankruptcy (now mandated) does not solve the problem.

That said, there are some organizations that focus on financial literacy
skill-building, that help consumers understand the consumer financial
markets through programs and training and study.  Some of these groups focus
on children; others focus on adults; still others focus on vulnerable
communities.  Examples of national organizations that do this are:
JumpStart, National Council on Economic Education and National Endowment for
Financial Education. The non-profit I ran, based at NYLS, is called the
Coalition for Consumer Bankruptcy Debtor Education.

There are organizations that focus on why people get into debt and what is
happening in the consumer financial markets. These groups work to advocate
against unfair lending and provide materials, run programs, issue reports,
testify before Congress and work at the policy level. Examples of national
organizations are: Center for Responsible Lending, National Consumer Law
Center and Demos.

If people want to help others in debt, the latter two types of organizations
are safer and better.  All are worthy causes.

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