Debt Counselors of America Help Debtors Avoid Filing Bankruptcy

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Close to 1 million Chapter 7 bankruptcies were filed in 1997. Without the Debt Counselors of America (, the number could have been higher. Acting as a liaison between the debtor and creditor, the nonprofit group devises consolidation and payment plans to help monetarily challenged Americans.

"Most people in debt do not want to declare bankruptcy, but that is what the [lawyers'] radio, television and newspaper ads tell them to do," said Steve Rhodes, president of Debt Counselors of America. "The credit-card companies and banks do not want the consumer to go bankrupt either, but they are working with an individual who is in trouble, embarrassed and doesn't realize they can find help beyond declaring bankruptcy."

Begun in 1994, the DCA has recently seen the fruition of its master plan to provide the bulk of its services and information over the Internet. About 40 percent of its clients contact the counselors through the Web site.

These users can access pages of information, find advice and e-mail or ask questions of financial counselors and attorneys in the chat room absolutely free.

The only on-line charges are minimal, $2.50 to download some of the company's debt-management and financial publications.

"The Web site, in fact, nothing we do, is a profit center for DCA," Mr. Rhodes said. "Charging for publications allows us to have some knowledge of who has bought our intellectual property that is often being pirated and placed on other Web sites."

A recently added service of DCA is the "Get Out of Debt (Radio) Show," where Mr. Rhodes and Michael Kidwell conduct a one-hour live Internet broadcast every week. On-line listeners can call in, e-mail in or chat in to take part in the broadcast and get some questions answered on the show, which DCA broadcasts from its own studio.

"At first, we broadcast from a radio station, which cost money to rent the air time, and we reached a limited number of people," Mr. Rhodes said. "With the in-house studio, the equipment and quality of the show is better, and we are able to broadcast to an extremely large number of people for far less cost than we could on the radio."

Clients of the debt counselors range from individuals in the DCA's mid-Atlantic back yard to a soldier on the front lines in Bosnia whose already shaky financial picture began to crumble when he was sent overseas.

"He can't make phone calls from Bosnia to talk to the credit-card companies and make plans to keep his financial house in order," Mr. Rhodes said. "But he could e-mail us and talk to our counselors on line."

For the soldier, the ability to work on line is important because of his geographical location. Others are attracted by the advantage of being able to work with people without having to take time off from work to go to an office or suffer the embarrassment of having to speak to someone face to face.

By 2001, the total number of personal bankruptcies is projected to increase to more than 2.2 million, according to data released by Visa U.S.A.

DCA's goal is to try to encourage financial planning so people avoid getting into trouble and to help customers restructure their finances if they do get into trouble. …