Bob Sullivan, an author and journalist who contributes to MSNBC.com amongst others, and is considered an expert on identity theft, recently wrote on his blog about the new bankruptcy laws that took effect.
He highlighted the fact that the victims of Katrina will get an exemption (as I asked in a previous post) but he also highlighted another problem: When you file for bankruptcy now, you are forced to go to "Credit Counseling", at one of a handful of "accredited" counseling firms.
I don't know how familiar you all are with these firms, but as someone that was one in deep debt (post-college) and considered filing for bankruptcy, I investigated those firms, and everyone I ever talked to scoffed at the mention of them. It seems like a good deal, right? You don't file for bankruptcy, you work with your creditors, you get your life back on track, and you did it with honor. Problem is that many of the same credit card companies that pushed for this reform look down on people who use the counseling agencies more than if you just went straight through bankruptcy. A lot of times, a counseling agency can stain your credit record more than the "final solution" of Chapter 7.
Worse yet, many of these agencies are far from reputable and work to deceive the very people they claim to protect and work with. They are generally very shady.
Anyhoo, read the post from Bob Sullivan. I think he raises some good points.
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