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Credit counseling agencies coping with increases in clients

It’s a sign of the times: credit counseling organizations are seeing more clients.

With offices in Tupelo and Biloxi, Consumer Credit Counseling Service of Greater New Orleans has been in business since 1965 and is licensed in Louisiana and Mississippi. Executive vice president Tom Collens says the flow of clients has picked up within the last two weeks.

“The increase wags a little bit behind the economic slowdown,” he said. “Someone announces the economy is bad and people and companies react, and it gets worse. A lot of it is housing related, but it’s also loss of jobs and credit problems.”

He expects another increase of clients in January when bills for holiday spending are received. “People are accustomed to a level of spending and they’ll be over extended this year. Also, there will be a lot of people who won’t get Christmas bonuses this year and they’re accustomed to getting them,” he added.

As for credit card debt, Collens says a lot of people are just treading water – not getting out from under the debt but not drowning, either. “Different people have different thresholds at which they look for help,” he said. “Some will never ask for help until they’re headed into bankruptcy, and there are those who’re in between.”

To handle the increase in clients, Collens is clearing the workload decks of his counselors so they can concentrate on counseling by shifting more non-counseling work to the clerical staff. He is not considering hiring more counselors at this time because of the delay involved to get them certified and up to speed.

For anyone looking for a counseling agency, Collens says the main thing is to make sure they’re reputable and accredited. “Anyone who’s a member of the National Foundation for Credit Counseling fits both of those criteria. Its web site (www.NFCC.org) lists agencies’ names near where you live,” he says. “Another organization that’s reputable is the Association for Independent Consumer Counseling Agencies.”

From her facility in Memphis, Betty Jones-King has an enormous amount of people coming in for counseling, many of them from North Mississippi. She’s executive director of 2nd Chance Budget & Debt Family Counseling Services.

“We’ve had a 55 percent raise in clients this year,” she says. “We try to help people get back on their feet. Our name is born out of wanting to give people a second chance. The economy is sending more people in.”

She’s seeing clients having trouble with mortgages, often with subprime loans. “Foreclosure is a problem now. We try to help clients stay in their homes. Sometimes we can negotiate for them,” she said.

A large number are coming in to file for bankruptcy. A federal law change in 2005 requires anyone filing for bankruptcy to get credit counseling.

“Clients can’t pay their bills because of catastrophic illness and they can’t go to work or they’ve had a loss of income because they were laid off or their companies have cut back on their hours or they’ve been forced to take a job that pays less,” King said.

As a small agency, King sometimes has to refer the client overload to other agencies. There are also occasions when she meets clients on Saturday.

She advises anyone looking for a credit counseling service to check carefully, calling the Better Business Bureau to find out about any issues agencies may have. Searching the Internet for state-approved agencies is also good.

“If they’re licensed by the state that means they have been scrutinized,” she said. “Clients should assess their situations. Don’t delay getting counseling; that just makes things worse. Your creditors will come after you.”

Family Credit Management Services has spoken with 44 percent more consumers in the first 10 months of 2008 than it did in the entire year of 2007.

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

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