In the Spotlight: Bankruptcy Judge John C. Ninfo II
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Two issues were stressed during a CARE presentation in Miami: credit card debt and developing a budget. Why?

Well, I think if you were to spend any time in a bankruptcy court in this country you would see the two major problems being credit card debt and more than three-year car loans.

The budgeting aspect is because I believe it's only if you have an effective budget that you can really understand: One, what you are spending your money on; two, whether those things are needs or whether they are wants; and three, if you have any extra money that you can use to purchase your wants or to incur debt.

If people had a budget and actually saw how much, if any, disposable income they had, and before they borrowed any money did what people had to do in the old days 30 or 40 years ago, which is justify actually how you are going to pay back that debt over a reasonable period of time, people could never and would never borrow the kinds of money they borrow today.

 Listen as Judge Ninfo tells how a bankrupt couple wasn't able to determine their needs versus their wants.

What misconceptions do young adults have about debt and bankruptcy?

I can tell you, for example, about credit cards. I used to say this anecdotally: Credit cards are not new money, free money or more money.

If you come to bankruptcy court and listen to the explanations of so many debtors as to how they got so deeply into credit card debt, like I said one ... two ... three times their income in credit card debt, your only conclusion would be that they actually believe that it's free money, new money or more money.

You couldn't come to any other conclusion. Young people are often under that misconception that as well.

How does someone get a program started in their state and what can parents and school officials do to encourage programs in their local schools?

Well, I often said CARE doesn't really have a national marketing plan, because it is a grassroots initiative of the bankruptcy community and not a national organization or foundation.

CARE has spread really in a the-chicken-or-the-egg kind of process.

In some situations, interested bankruptcy professionals have learned about CARE, taken the initiative to start a CARE program in their community and gone out to solicit schools.

In other situations, CARE programs have started because of the initiatives of educators or parents who have learned about CARE. They would contact us because they didn't have a program locally, but would like to have CARE come to the school.

Oftentimes, what we then do is match those interested educators or parents up with bankruptcy professionals in that area and say, "Look here's some programs that are all set up for you. Would you consider CARE in your community?" Oftentimes what happens then is they will initiate a CARE program and respond to that interest.

So, it's very much a chicken-or-the-egg thing. Sometimes the egg comes first, sometimes the chicken comes first.

What would you like to see happen to your program within the next five years?

What I would like to see happen is every high school senior and every college freshman in the country becomes exposed either to a CARE presentation or somehow receive some of CARE's materials. Because, then I would know that all these students are aware of the need to increase their financial IQs, to get down to business and really learn something about personal finance.

In today's consumer consumption society where all of the deck is stacked against you -- with the advertising and the acceptance of debt and with the ease in which you can obtain credit and so forth -- unless you become educated about personal finance, you will ultimately crash and burn.

To see and hear a CARE presentation, visit the companion story, "Teaching kids about financial literacy."