Prior to 1951, citizen who were in debt and finding to consolidate bills had few options since there were no credit counseling agencies in existence yet. credit grantors were indeed the first citizen to recommend such an club when they formed the National Federation for credit Counseling (Nfcc) that year. The customary intent of the Nfcc was to monitor legislative and regulatory activity for the advantage of its sell members. As far as consumers were concerned, the only thing the Nfcc originally participated in was social schooling to promote financial responsibility and help consumers avoid bankruptcy.
In the early 1960's, the first local consumer counseling branch opened to serve citizen with debt problems directly. The popularity of these agencies grew over the years to the point where there was once over 1,000 agencies ready to sustain the public; however, this form has shrunk to colse to 300 today.
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The Nfcc is a trade club and it does not provide any direct services to either their sell clients or to consumers. Creditors are free to solicit their advice, but the Nfcc does not get complicated in collection efforts which they bring against their clients. From 1951 until 1993, the Nfcc was the only trade club dedicated to the consumer credit industry.
The connection of Independent Consumer credit Counseling Agencies (Aiccca) was the second trade club to form in response to the growing problem of consumer debt. They were the first competition that the Nfcc faced in 42 years and were formed amongst concerns over the lack of industry-wide standards of ethical conduct.
The major dividing point between the two organizations was that the newer Aiccca was in favor of providing debt management solutions to consumers over the telephone, while the Nfcc was strongly opposed to this, favoring instead counseling sessions that were conducted in person.
In time, the Nfcc came colse to to Aiccca's way of mental and formally promoted telephonic delivery of services. Today, credit counseling agencies reach consumers in person, straight through large call centers and the Internet. Membership in either trade club is completely voluntary and credit agencies remain free to subscribe to their own methods of conducting business.
The credit counseling manufactures saw an upswing in business with the 2005 duct of the Bankruptcy Abuse stoppage and Consumer security Act. In response to growing bankruptcy fraud, congress passed a portion which required all citizen filing bankruptcy to unblemished a agenda with a non-profit allocation and debtor schooling center. This course must be completed within the 180 days prior to filing for bankruptcy, and it must be followed up with a post-filing debtor schooling counseling session. If neither of these requirements is met, debtors may be ineligible to have their debts discharged.
The popularity of credit counseling services has grown beyond the United States into Europe, where consumers there can attain debt help straight through either a for-profit branch or a charity such as Christians Against Poverty. It appears to be an manufactures that is here to stay, both in the Us and abroad.
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