Daniel Akaka: “I rise today to speak on my pending amendment, No. 105. Section 106 of the bill does not allow consumers to declare…”

“I rise today to speak on my pending amendment, No. 105. Section 106 of the bill does not allow consumers to declare personal bankruptcy in either Chapter 7 or Chapter 13, unless they receive a briefing from an approved nonprofit credit counseling agency within six months of filing. The bill also requires each consumer who receives bankruptcy protection to take a credit counseling instructional course. The credit counseling instructional course requirement is intended to provide financial education to consumers who declare bankruptcy so they can attempt to avoid future financial problems. Approximately one-third of all credit counseling consumers enter a debt management plan. In exchange, creditors can agree to offer concessions to consumers to pay off as many of their debts as possible. These concessions can include a reduced interest rate on the amount they owe and the elimination of fees. However, most credit card companies have become increasingly unwilling to significantly reduce interest rates for consumers in credit counseling. A study by the National Consumer Law Center and the Consumer Federation of America revealed that 5 of 13 credit card issuers increased the interest rates they offered to consumers in credit counseling between 1999 and 2003.”