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Study Shows BAPCPA Counseling Mandates are Beneficial for Consumers' Financial Health

Money Management International (MMI), the nation’s largest full-service credit counseling and financial education provider, announced today the results of the first phase of a bankruptcy study designed to measure the impact of its bankruptcy counseling and education programs.

In connection with Dr. Angela Lyons, a leading researcher in financial education and program evaluation at the University of Illinois at Urbana-Champaign, a multi-phase research study was launched in 2009 to investigate the impact of the consumer counseling and education mandates outlined in the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. The first phase of the study was focused on collecting data from a national sample of consumers who participated in MMI’s bankruptcy counseling program, with the specific purpose of measuring and quantifying the educational value of the counseling experience.

“As a leading provider of bankruptcy counseling and education, it is our responsibility to ensure our programs are successful in empowering individuals and families to build future financial security,” said Ivan Hand, president and CEO of MMI. “We are pleased to have had this opportunity to measure the impact of our programs through participation in this study.”

The results from the first phase reveal that debtors significantly benefited from the counseling requirement and were satisfied with their overall counseling experience. Other key findings include:

Increased knowledge – Debtors were administered a financial knowledge test before and after counseling. On average, debtors scored 77 percent correct on the pre-test and 86 percent correct on the post-test – an increase in knowledge of 11 percent.

Increased financial confidence – As a result of participating in the counseling session, over 97 percent of debtors felt more knowledgeable about the bankruptcy process and the options available to deal with their current financial problems. More than 91 percent felt that their overall ability to manage their finances had improved.

Satisfaction with counseling – Overall, debtors were very satisfied with their bankruptcy counseling experience. Over 99 percent found the counseling course helpful and about 97 percent admitted that they were more likely to seek counseling again if faced with financial problems in the future. Almost all debtors seemed to appreciate the educational value of the counseling session and did not feel that the requirement had been a burden or an administrative obstacle.

In addition, the study found that debtors experienced overall improvement in their attitudes and behavioral intentions with regard to financial matters. Interestingly, the results also suggest that, on average, debtors benefited from the bankruptcy counseling program regardless of whether their indebtedness resulted from unfortunate circumstances, such as unexpected medical expenses, or from poor financial management.

Phase two of this study, which is currently underway, attempts to measure the long-term impacts of both the counseling and education requirements by following up with debtors after they complete the entire bankruptcy process. “Preliminary evidence point to marked improvements in financial management skills and practices, which suggest that credit counseling may in fact be a viable mechanism to help debtors deal with their financial situation and obtain a fresh start,” said Dr. Lyons.

The results from phase two are scheduled for release later this year. To receive a complete copy of the study and learn more about the impact of bankruptcy counseling and education on debtors’ financial well-being, visit

About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit-counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI’s counselors are both HUD certified to deliver housing counseling services, including delinquency mortgage counseling, and approved by the EOUST to deliver bankruptcy counseling and education. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. Services are available in English or Spanish. To learn more, call 800.762.2271 or visit

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