There is life after bankruptcy, according to Fordham Law Professor Susan Block-Lieb. She and her colleague, New York Law School Professor Karen Gross, have recently received more than $40,000 in funding to spearhead a pilot debtor education program this year for residents of New York’s eastern district who have filed for bankruptcy. “Because ours is a credit economy, it’s really implausible to say that once you file for bankruptcy you’re not going to borrow again,” says Block-Lieb. “You still have to learn how to balance your checkbook, know the difference between a secured credit card and an unsecured card, or what various credit scams are out there.” Block-Lieb is treasurer of the Coalition for Consumer Bankruptcy Debtor Education, an organization formed in 1998 in response to the national bankruptcy review commission’s request for current data.
Twenty-five experts, including lawyers, psychologists, judges and representatives from credit card companies were assembled to conduct research. Considering the million-plus Americans who file for bankruptcy each year, all agreed that education against bankruptcy is something that should occur. It is their hope that the research obtained from the pilot class will prompt other agencies to use their model as a means of educating people about managing their finances. “We’ll be approaching people at the courthouse when they go to bankruptcy court and letting them know that this is a service that’s available to them,” says Block-Lieb. One three-hour class will be offered to several small groups of randomly selected people from Brooklyn, Long Island and Staten Island.
Instruction will cover topics including the nature of money and spending, the meaning of credit, distinctions among credit cards, buying and spending approaches and habits, common consumer credit scams and rights following discharge (when your unencumbered, non-exempt assets get liquidated by a trustee). In order to track the progress of those who attend the class, questionnaires will be sent out from the time it has ended, right up to six months. “That way, they’d be reporting back on their own borrowing activity,” says Block-Lieb.
A graduate student will be selected to study the results, which will be compared to a randomly selected control group of the same number. The Coalition hopes that its educational program will appeal to those debtors who have proven to be particularly vulnerable – young people, women, minorities and the elderly. “We are hoping that what we learn from the research will assist whatever group wishing to provide financial literacy training to debtors across the country and they can replicate our pilot program,” says Block-Lieb. “We want to let people know that they’re not pariahs and empower them about their own financial life.”