GreenPath Issues Statement on the Importance of Credit Counseling
Service Especially Important for Homeowners Facing Bankruptcy, Foreclosure and Other Debt Challenges
Farmington Hills, Mich., September 26, 2008 — GreenPath, Inc., today released a statement regarding the importance of credit counseling and financial education to people seeking financial success and, especially, to those facing debt, bankruptcy and housing foreclosure challenges. GreenPath’s CEO, Jane McNamara, made the statement in reaction to a bill currently being considered by Congress. The bill’s intent is “to provide authority for the Federal Government to purchase certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes.”
GreenPath leadership, along with many other leaders in the nonprofit credit counseling industry, is concerned about a specific clause in the bill that would waive the credit counseling requirement for debtors filing for bankruptcy, in the event that a foreclosure sale of the debtor’s principal residence is pending.
“We are shocked and saddened that our representatives in Congress would consider waiving the credit counseling requirement for people facing such a serious financial challenge as a combined bankruptcy and foreclosure,” said McNamara. “For debtors who have never had a credit counseling session, there could be no better time for this one-on-one counseling and education. It is an opportunity to review and analyze household budgets, explore options, access available housing assistance, and obtain recommendations that can help them land on their feet and move forward to a brighter financial future, even if they do end up in foreclosure and/or filing for bankruptcy in the present.”
Currently, Title 11 (the Bankruptcy Code) requires all prospective bankruptcy filers to first complete a mandatory credit counseling session with a United States Trustee-approved credit counseling service. Over 160 not-for-profit agencies provide immediate assistance to those seeking counseling, but in the event that immediate counseling is not possible for an individual or couple, those facing “exigent circumstances” can delay their counseling sessions. This ensures that the requirement helps these clients learn how to improve their financial circumstances without creating a time constraint for those who must file quickly in order to save their homes from foreclosure.
“The facts are that many Americans need support with the basic principles of money management, budgeting and personal finance and that debtors in foreclosure need credit counseling and education as much — or more — than anyone else,” said McNamara. “Credit counseling addresses the root causes of financial problems and helps to ensure history does not repeat itself. Waiving the requirement would be a step backward that fails to either protect or support Americans in achieving financial security and wellness.”