The new bankruptcy law went into effect Monday and one of its key provisions requires people to get credit counseling before going ahead with the bankruptcy. Karen Atwood is the executive director of Consumer Credit Counseling Service of Northeastern Iowa — one of the agencies that’ll be providing the counseling.
She says the reason for the counseling is to give people a better look at their options and to let them know what the consequences are going to be of bankruptcy, or of debt settlement or a debt management plant. She says they need to look at different ways of getting rid of the debt. Atwood says before the law changed, people could use filing as an easy escape route to their debt. Now she says they have to learn more about their situation. She says it’s spending more time going through how the bankruptcy is going to effect them in the future.
She says it’s not intended to discourage or eliminate bankruptcies, but to make sure that before people file, they’ve weighed all their options. Atwood says the new law will hopefully send a signal to everyone about the importance of properly managing their finances before it’s too late. She says they currently see “an awful lot of people who’re too far behind.” She says someone with credit card debt of one-thousand or two-thousand dollars, that’s something they can help them bail out from.
Atwood says too many people keep piling up the charges on their plastic, and then it’s much tougher to help them. She says when they come in with credit card debt of 95-hundred, 15-thousand or 18-thousand dollars, she says it takes a lot of time and money to pay it off. Atwood says there are still cars that break down, appliances that need fixing, birthdays and holidays, and the money isn’t there. She says if the people come in earlier they can get the problem under control.
Atwood says there was a rush of bankruptcy filings to beat the change in law, and she didn’t expect much new business right away. But, she says she was surprised to already get calls for the credit counseling Monday morning. Atwood works in Waterloo and C-C-S has other offices in Ames, Mason City, Dubuque, Marshalltown, Forest City and Grinnell.
