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While our nation’s policy-makers continue to wrestle over elements of the long overdue bankruptcy reform legislation, millions of consumers across the country are facing the daunting prospect of how to manage mounting personal debt. Consumers looking to avoid bankruptcy and regain financial stability are taking matters into their own hands by unilaterally opting for credit counseling now, before it is mandated under the pending bankruptcy reform legislation. The well publicized overhaul of our bankruptcy laws has helped shine a light on the immense value of credit counseling, which is an integral element of the reform effort. This enlightenment is pushing thousands of consumers to take control of their own financial destiny by seeking out credit counseling immediately. The growing ranks of those turning to credit counseling for financial support have a dual positive effect. First, consumers are giving themselves the opportunity to regain financial stability before confronted with bankruptcy, and second, the credit counseling industry is priming itself to meet what is expected to be an enormous demand for its services once bankruptcy reform legislation is signed into law. While equally important, the latter of these two benefits debunks overblown concerns by some critics about the capacity of the credit counseling industry and its ability to meet consumer demands. In fact, the credit counseling industry is well positioned to accommodate an influx of debtors who will be obligated to rely on agencies to examine and help rectify their financial troubles. Still, some consumers remain unaware of the benefits of credit counseling and often ignore escalating personal debt until it’s too late. These consumers are then left with only the limited option of declaring bankruptcy. While declaring bankruptcy may appear to be a quick fix for financial troubles, it can irrevocably damage an individual or household’s credit report, hindering future purchasing power and even employment prospects. These sobering facts are why the credit counseling provision of the bankruptcy reform legislation is so critical. During the past five years the number of consumers seeking credit counseling has grown by an enormous amount. Credit counseling agencies help these consumers regain financial freedom by helping them to repay debts without borrowing; many are then able to avoid bankruptcy. Some credit counseling agencies also provide a number of other valuable services, including analyzing consumer credit reports, settling outstanding debt, developing Debt Management Plans (DMP), providing homebuyer assistance, and generally serving as a personal financial counselor offering educational tools and knowledge that enables consumers to handle a wide range of complex financial issues. Consumers, as well as the employers and creditors wishing to assist those with financial difficulties should not wait for bankruptcy reform legislation to be enacted before seeking financial assistance through a credit counseling agency. The urgency surrounding these circumstances provides an additional incentive to seek financial management assistance now before being overwhelmed by debt. In an effort to avoid any such demoralizing hardships, consumers should take immediate steps to get a better understanding of whether personal debt, of any amount, poses a threat to their financial stability.

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