Theresa (Still) Hogenkamp, M.S.


Education: Bachelor of Science in accounting (May 2000)

Master of Science in accounting from Kansas State University

McNair Project: Effectiveness of Credit Counseling Services (1999)

Mentor: David Donnelly, Ph.D.

For twenty years, bankruptcy filings in the Untied States have been increasing at a phenomenal rate. Consumer debt and bankruptcy filings have increased more than 700% since 1978. Congressional committees have been formed to evaluate the causes and possible ways to restructure the laws so bankruptcy filings will decrease.

Many people have sought the assistance of credit counseling services to manage their debt and avoid filing bankruptcy. However, are the counseling agencies really doing a good job at reducing debt and bankruptcy claims for their clients? Studies on the effectiveness of the counseling agencies have generally been done by the agencies themselves and seem to carry many biases.

This study was conducted independently to examine consumer benefits from various credit counseling agencies across the United States and to evaluate their practices. The study includes an email survey of credit counselors and attempted to find a profile that best describes the consumer who benefits the most from the credit counseling.

Many counselor responded that they offer educational programs and budget counseling to their clients. Survey counselors felt that if they were able to reach more people and educate them possibly bankruptcy and excessive debt could be avoided. All survey respondents reported that their average clients were experiencing financial difficulty due to excess credit card debt. The research determined that the credit counseling agencies are effectively assisting in the reduction of debt and bankruptcy filings.