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Mandatory Counseling, A Good Idea in Theory

• Provide evidence of an annual audit of trust accounts and have adequate financial resources.

• Ensure credit counselors and directors of the agencies don't directly or indirectly benefit financially from the outcome of counseling services.

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So, in addition to having to oversee hundreds of thousands of bankruptcy cases, the trustee program would have to become a watchdog for credit-counseling agencies it recommends to debtors. (By the way, the office has to renew each agency's status on the list every year.)

"This is going to be so time-consuming for an agency that hasn't had excessive resources," Morris said. "It's a daunting task."

At least the legislation allows the credit-counseling requirement to be waived if qualified firms aren't available to debtors.

Despite what proponents of this legislation claim, the credit-counseling provision wasn't put in the law to help debtors. If it had been, why doesn't it call for comprehensive credit counseling? The legislation says only that the counseling can include a "briefing" and options "outlined." Can somebody really be counseled well over the Internet or by telephone? I don't think so.

The counseling provision is there as a roadblock. It's a setup, lobbied for by banks and credit card companies, to steer people away from bankruptcy to debt repayment plans.

Since the Republican-led Congress is intent on making the federal government a collection agency for the credit card industry, I hope the trustee program will steer debtors, many of whom are in financial trouble because of a job loss or major illness, to agencies that will fairly assess people's situations and recommend bankruptcy sooner rather than later if that's what's best for them.

Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at www.npr.org. Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or send e-mail to singletarym@washpost.com. Comments and questions are welcome, but because of the volume of mail, personal responses may not be possible. Please also note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

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