In the '80s, we began recommending non-obligatory agreements with full disclosure as the way to recover unsecured money in bankruptcy. Hardly anyone listened. Within a few years Voluntary Repayment Agreements (VRAs) started being used. By this time, we were recommending that members who were no significant collection problems be offered retention of their lines of credit in exchange for VRAs. Hardly anyone listened. To date, our Bankruptcy Program clients have recovered hundreds of thousands, perhaps millions, of dollars using this strategy.
A few years ago, we started 'priming the pump' for the next phase of bankruptcy management: marketing bankruptcy. Hardly anyone would believe us. I announced at the Grays Harbor Chapter Meeting at which I spoke that we would begin emphasizing the strategy of 'marketing bankruptcy' as quintessential in your bankruptcy strategies to minimize losses.
Your members are watching ad after ad about how to deal with debts. Most of these ads are from attorneys, with an occasional add from Consumer Credit Counseling Service (CCCS), or other pro-rating agencies. The ads from attorneys are distorting truths, such as telling your members that Chapter 13 is debt consolidation among other things.The pro-rating agencies, though encouraging your members to deal with their debts through repayment, also benefit from the concept that their service is a form of consolidation. Attorneys knock these agencies as 'agencies of the creditors.'
That, coupled with the realization that some sort of bankruptcy reform is imminent, makes this the time that you must start betting the truth about bankruptcy to your members. CCCS literature isn't enough. You should include a packet about 'How to Retain Membership if Bankruptcy is Filed' in the new member packet. Seminars for members on practical issues about credit should be on the agenda, and done collectively through Chapters.
Now is the time to take action on this issue!