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Success is hard to
measure at credit counseling agencies
By Holden Lewis • Bankrate.com
 Why
don't credit-card companies simply reward good debt-counseling agencies
and punish the bad ones? Because it's difficult to measure success.
At Debt
Counselors of America, success is measured by the accuracy of
information provided to creditors: loan amounts and account numbers,
for example. "I believe we have a 99 to 98 percent accuracy rate,"
co-founder and vice president Mike Kidwell says.
Kidwell adds that he has asked lenders how his
nonprofit agency could do a better job, but hasn't received suggestions.
The National
Foundation for Consumer Credit, the umbrella organization for
1,440 local debt-counseling agencies, points to studies that measure
how many clients end up filing for bankruptcy.
About one-third of people who seek help from
member agencies end up in debt-management plans. In a recent survey
by the foundation, 7.4 percent of clients who enrolled in debt-management
plans declared bankruptcy within a year.
That's impressive when you consider that 82
percent of clients are insolvent when they walk in the door for
their first counseling session, says Suzanne Boas, president of
the Consumer
Credit Counseling Service of Greater Atlanta, a member agency.
Most people seeking help from the agency spend
80 percent or more of their monthly income to pay their debts.
"They're that financially fragile," Boas says.
"I think it's important to discuss how ill the patient is when they
come in to us."
-- Posted: Sept. 13, 1999
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