Talk:Credit counseling

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[edit] Myvesta

I was concerned when I read the credit counseling page recently and added information to help correct some common incorrect information about credit counseling but it was edited out immediately.

I'm wondering if the problem that lead to the information being edited out was that someone did not believe that it was true, it is.

So how can expert edits be made and the other side of the coin presented so that it is not immediately hacked out, leaving readers with only half the story?

Edited content that was removed below.

Inside credit counseling
All credit counseling executives are aware of the "secret" of the industry but most are afraid to speak out about it for fear of losing funding from the very creditors that provide operational funds to the agencies.
Steve Rhode, president of the not-for-profit organization Myvesta US and host of the radio show MoneyHelp stated, "Ïn the United States, credit counseling has become a wolf in sheep's clothing. While credit counseling agencies claim to operate for the benefit and welfare of consumers, they really have little to no power today to represent consumers with creditors to develop a fair and equitable repayment plan for people that need assistance with debt. Today, the creditors are the ones that dictate to the credit counseling agencies the terms they will accept for repayments, they are not negotiated, and debt repayment plans are not designed for the best interests of consumers in trouble. The creditors now tell the agencies how to operate, no matter what the affiliation of the credit counseling agency is."
Rhode said, "I am the president of Myvesta US, a not-for-profit agency that delivered repayment plans for years. I am well aware of the inside actives of agencies and creditors. Years ago, debt repayment plans were an effective tool to help reduce the financial burden of consumers in trouble. However, that is no longer the case."
"In 2003, Myvesta US decided to stop offering debt management programs once the creditors seized such control and power over the US credit counseling agencies that they could not operate independently and as an impartial third-party between creditors and consumers. It is only a matter of time before the curtain is pulled away from in front of credit counseling agencies that continue to offer debt repayment plans today and they are exposed for what they have allowed themselves to become, agents of the creditors."
While credit counseling may have started as a social service enterprise, today the vast majority of the funding for credit counseling agencies is derived from its collection activities of people enrolled in their debt repayment programs. All credit counseling agencies are primarily compensated by creditors for good collection efforts from consumers, not for offering the most compassionate, appropriate, equitable, or human care.
Some creditors claim to have stepped away from collection performance funding and moved to "black box" funding in which they claim to not provide funding based on collection performance. Some agencies that have not met the creditors collection criteria have been cutoff from funding leading people to see through the "black box".

—The preceding unsigned comment was added by Debtguy (talk • contribs) 01:09, January 12, 2006 (UTC)

[edit] Response to above

Thanks for your interest in this article, and thanks for your contributions. WELCOME to Wikipedia! I did not revert the content you added, and I cannot speak for whomever did. But looking at it, I see at least a couple of potential problems. First, Wikipedia always strives for a neutral point of view in our articles. This means we should lay out the basic facts of a subject as clearly and as neutrally as possible. When a subject is controversial, we should report all sides of the controversy with fairness and balance. The "tone" of your contribtuion suggests that it represents "the truth" about the subject. While it is a valid viewpoint that should be presented, this tone is not appropriate. Second, the lenghty quote froma single source suggests the possibility of a copyright violation or possibly orignal research both of which are prohibited. Finally, the content reads a bit like an advertisment for the organization, which is also not appropraite for Wikipedia. I hope this is helpful, and I hope you will continue your interest in Wikipedia! TMS63112 02:10, 12 January 2006 (UTC)

[edit] Recent changes (Jan. '06)

In the spirit of TMS63112's response above, I have worked to bring the article back to neutral territory. I have not completely backed out all of the edits made by Debtguy, but have edited some of the statements that are problematic from a POV standpoint. Some of the language, like "attempting to educate" and "have relationships with creditors" are inflammatory if one is familiar with the topic. I have changed these to "offering education" and "negotiating with creditors" to restore neutrality. One edit, saying credit counselors "will" receive compensation from creditors instead of "may" receive compensation, is factually incorrect and has been reverted.

There is a section specifically for "criticisms of credit counseling" designed to give both sides of the issue; I hope we can keep it balanced as we proceed. Shaxpeer 17 January 2006

[edit] two edits involving "opinion" and one technical error

I found the article, as written, a good overview of the subject, however:

1. The following sentence is at best an opinion or political statement and therefore should be removed:

The author states...

"Many of the most vocal critics of credit counseling are lawyers and lawyer-funded groups, which view credit counselors as opponents because of their stated goal of helping consumers avoid bankruptcy."

It's also contradicted by all the material that precedes it, the reams of lawsuits, FTC and IRS actions, as well as being POV. An entire section could be devoted to the Ameridebt situation...Flawiki 13:51, 6 February 2006 (UTC)
I don't agree that the Ameridebt situation, which involved 1 out of over 1,000 credit counseling agencies, should be included in the entry about the credit counseling industry as a whole. I'd agree to a separate entry about Ameridebt and a link to it, but creating an entire section on the Credit counseling page for Ameridebt would only serve to taint the entire credit counseling industry. Talk about POV. Now, as for the statement about lawyer-sponsored opposition to credit counseling, I agree that it may need to be modified, but I think some statement to that effect should be included if we're going to leave in the 2003 NCLC anti-credit counseling report. Shaxpeer 16:21, 6 February 2006
That's like saying Enron is 1 out of 1,000 energy scammers. Ameridebt was scam, pure and simple. And a huge one at that. POV? Ask the IRS. I guess if I were raking in $$$$ on struggling debtors who ought to be in bankruptcy I'd think think mentioning the Ameridebt scam was POV. It's ironic Ameridebt wound up in bankruptcy, though isn't it? At the end of the day, the fact of the matter is credit counselling is often a rip-off, it doesn't actually lead to the relief people are led to believe because it can't impose a solution on overreaching creditors. Moreover, many of these "counselling" operations are financed by the credit industry. People can gauge for themselves where their loyalties are. And there's no duty on creditor counsellors to stand for their clients, that's why Congress imposed the silly pre-filing counselling requirement: Congress had been bought and paid for, as is common knowledge, by the credit counselling industry, to divert debtors into DMPs. There's no POV about that at all, it's a fact. You're deluding yourself if you truly believe otherwise (why else force everyone no matter what their situation into counselling->DMP? It doesn't work)Flawiki 00:12, 7 February 2006 (UTC)
If you think credit counselors can afford to buy off congressmen, then you really don't know much about the industry. I'll readily agree that the creditors bought and paid for BAPCPA (and didn't get their money's worth, IMO), but I see plenty of POV and little fact in your interpretation of the "silly" credit counseling requirement. Quite simply, BAPCPA attempts to make bankruptcy like other "social safety net" programs (welfare, unemployment, medicare) with means testing and the like. It's just that instead of relying on social workers to do the means testing, it forces BK attorneys to do it. Similarly, the credit counseling industry provides the counseling and education that social services might have provided if the creditors had written the law for Democrats instead of Republicans. I'm not arguing that this works, or was even a good idea, I'm simply saying that it's incorrect to assert that credit counselors "bought" the credit counseling requirement of BAPCPA. Shaxpeer 20:43, 8 February 2006 (UTC)

2. The following is technically incorrect as to provide a misleading view and should be either removed or modified:

The author states...

"Another common criticism of credit counseling is the false assertion that participating in a Debt Management Plan will ruin a consumer’s credit. Fair Isaac Corporation, the company that pioneered the use of credit scores, states that participation in a Debt Management Plan has no effect on one’s credit rating."

NOTE: FICO has stated this yes, but many mortgage and automobile loans prohibit loan approval if a customer is active in a DMP program (especially in conventional mortgages). Therefore the paragraph as stated is untrue. The use of author's term "Credit Rating" suggests the ability to be creditworthy. FICO simply said a DMP didn't affect their score -- which is very different. Unsigned edit by User:68.95.248.244 23:18, 5 February 2006

Okay, I agree. I changed "credit rating" to "credit score" and removed the word "false." Shaxpeer 16:21, 6 February 2006
The entire spin on this article is approaching false You're involved with one of these counselling operations, yes? Come clean. I practice consumer bankruptcy law so you know where I come from (I actually have to deal with the folks your industry hoses most reliably, and they do try, God knows why...)Flawiki 00:12, 7 February 2006 (UTC)
I see no point in responding since you've made your POV perfectly clear. I'd only point out that there's an entire section of "Criticisms of credit counseling" that's longer than the section on credit counseling itself. How much more balanced should it be?Shaxpeer 04:28, 8 February 2006 (UTC)
The article should be as complete as it can be while being useful. It's incomplete without some mention of Ameridebt. Concerning balance, it's often the crowbar used to try to eject salient facts that belong in an article. Untempered balance is not a worthy goal for WP. As for my stance it'd have been readily obvious by amongst other things, simply clicking on my user article. On the other hand, an avoidance of disclosing your own involvement with these DMP operations is pregnant with a countervailing POV. I consider this a good state however, as the conflict of opinion often results in a better article.Flawiki 13:29, 8 February 2006 (UTC)
I disagree about "untempered balance." By what should the balance be "tempered"? Your opinions? If you must know, I'm a published author on the subject of debt recovery. I advocate whatever is best for a particluar debtor, whether that be bankruptcy, settlements, counseling, or whatever. For the record, I don't particularly agree that conflict of opinion makes for better articles. I point to the BAPCPA article, which is neither complete nor useful. I'm trying to keep this entry from devolving to that state. Shaxpeer 20:43, 8 February 2006 (UTC)
What a lively group. (1) If the author edits in #2 wishes to stick to his point to reinforce that the credit score of someone in a DMP will not be affected, he could factually state that a DMP will not likely ruin their credit because the act of paying their bills will naturally raise the score. However, the counterpoint mandates the author to reveal that a consumer should be aware that enrolling in a DMP could affect their ability to get a loan, from some lenders, while in the program. (2) I also contend that blaming the lawyers, while fun for some, is inappropriate and irrelevent to article and seems out of place. The lobby against credit counselors arises from the belief by the collection industry that the not-for-profit status of the credit counselors gives them an unfair financial and market advantage over them. The IRS apparently agrees. The tax exempt revocations seem to be centered around whether a tax exempt credit counselor actually performed their mandated mission by assisting the community at large, other than their whole attention to their own DMP customers in a "collection practice" (no one knows for sure however). (3) And finally, the AICCCA was formed from the group of counselors who favored telephone delivery of debt management programs. The NFCC was, in the beginning strongly opposed to this telephone business model, primarily favoring face-to-face counseling as a more effective solution. As both moved away from credit (budget counseling) to debt counseling (DMPs) to financially survive, the NFCC model was more expensive to operate. As the NFCC began to fail the AICCCA moved in for a merger to save the equity that the CCCs had acquired over the years. These culture differences likely caused the controversy we are seeing today. Edeshields 06:04, 7 February 2006 (UTC)
"(1)" I see no problem with including a mention that enrolling a DMP could affect the client's ability to get a loan. I'm going to add that. "(2)" Mentioning lawyers goes to the credibility of the NCLC study. I'll just remove the mention of it and the disputed paragraph completely. "(3)" I'd get into the AICCCA-NFCC thing more, but the truth is AICCCA is barely breathing. I think there are fewer than a dozen AICCCA member agencies left. If AICCCA hadn't been historically significant, I'd argue that they don't deserve mention at all in the article.Shaxpeer 04:28, 8 February 2006 (UTC)
It seems you've just substituted the opinion that lawyers lead the opposition to credit counseling with the opinion that collectors do. If a statement that "many of the most vocal critics of credit counseling are lawyers and lawyer-funded groups, which view credit counselors as opponents because of their stated goal of helping consumers avoid bankruptcy" is inappropriate and irrelevant for this article, then I fail to see how your mention of the collection industry is appropriate. Further, the changes don't seem encyclopedic to me, and admitting that "(no one knows for sure however)" just confirms this. Shaxpeer 20:43, 8 February 2006 (UTC)
Sorry about that. The moderator to this site asked me to make the change after seeing the debate. So I did. I didn't actually know that people monitor these posts. In any case, regarding your comment... It is a real stretch to say that lawyers are opponents because they dislike a credit counselor's effort to help consumers avoid bankruptcy. This isn't true. (Don't worry, I'm not a lawyer). Maybe they don't like credit counselors for other reasons, but no one would even consider that argument. I just couldn't figure out the logic of it other than the usual joke about pushing lawyers over the cliff in a bus methaphor.

I was making a different point. The connection between the practice of collections and the IRS case could bust the industry up over the fact that one group pays taxes and the other does not -- when both business processes, says the IRS, actually produce a very similar outcome -- bills are being collected. Executives in the industry say they are told by the IRS that one key point of differentiation may be the ruling issue; whether the non-profits are actually serving the public at large as their non-profit charter mandates (other than their own paying clients). When you boil it down, the case is hard to make that they're different than collectors I'm told. And that's the logic the IRS is using (but I definitely don't speak for the IRS and don't work with them either).

I did a little cleanup by moving some related paragraphs around but tried not to change the meaning or context unless it wasn't true or biased. I also followed the moderator's advice. --Edeshields 01:06, 9 February 2006 (UTC)

The following edit was removed by Shaxpeer.

"The credit counseling industry derives over 90% of its income from fees associated with the collection of consumer debt on behalf of creditors" stating is as non-verifyable.

I posted as a bibliography the source of this statement in the links at the bottom of the article. They are sourced from two Georgetown University / NFCC studies that sourced their income streams and reported them in this public study called, "The Impact of Credit Counseling on Subsequent Borrower Credit Usage and Payment Behavior". Please review the report. —The preceding unsigned comment was added by Edeshields (talk • contribs) 03:38, February 9, 2006 (UTC)

I am a lawyer who suffered very tragic circumstances. I recently used one of these agencies in order to file for bankruptcy. I practiced corporate law. I am not antibusiness. Indeed, I was completely stunned by how unbalanced the information was. All the problems of bankruptcy were highlighted. The benefits were not even mentioned. I have strong emotions concerning the whole process. When the interview was complete, I told the counsellor that I practiced law and felt it was too favorable to the creditors. The clear legal interests of the debtors were never addressed. I ached for individuals who could not afford a lawyer. She agreed with me. Since the bankruptcy reform bill was enacted, she has counselled three individuals who needed a debt management plan. I hope this article stays neutral. I also apologize if I used this talk page as a message board. —The preceding unsigned comment was added by 75Janice (talk • contribs) 22:37, April 2, 2007 (UTC)

[edit] INACCURATE - Cautions regarding credit counseling (Canada)

I have searched the FCAC website and can find no such warning on credit counseling in Canada. This paragraph states non-profit organization also. I found "Credit Counselling Canada / Conseil de Credit du Canada (CCC), is a non-profit organization, established in 2000 and governed by a volunteer board of directors" http://creditcounsellingcanada.ca/about_us.html

I have no way of knowing who these volunteers maybe - bankers, lawyers, educators..? Could someone in the know offer sometime to clean this section up? Just asking :-) Please.

2Share 05:57, 08 October 2007 (UTC)