Many Enter New Year In Debt Up To Their Ears Credit Counselors Expand Service To Sandpoint, Kellogg
So, you spent 1995 loading up the credit cards, piling on the debt and dodging calls from angry creditors.
You’re not alone.
Consumer counseling officials said 1995 was a banner year for those seeking rescue from the quicksand of debt.
“It’s been very busy,” said Michael Hayes, director of education for Consumer Credit Counseling of Spokane, a non-profit organization.
With the Christmas season now over, consumer counselors are bracing for an onslaught of panicked spenders.
During Christmas “people don’t want to think about how much they owe, they just want to spend,” Hayes said. “About the second week of January the phones are so busy we can’t hardly keep up. They realize how much they’ve spent and they don’t know what they’re going to do about it.”
In 1993, Consumer Credit Counseling handled about 1,450 cases. For 1995, they handled about 2,300 clients, she said.
And the organization has seen its biggest growth in the number of North Idaho customers seeking help, Hayes said.
In response, Consumer Credit Counseling plans to begin offering consumer counseling in Sandpoint and Kellogg before the new year is out, she said.
Consumer Credit Counseling of Spokane provides financial counseling for those drowning in debt throughout the Inland Northwest. The organization teaches people how to better plan their finances. It also offers an alternative to bankruptcy in which the company negotiates with creditors to allow a person to pay off debts over a longer period of time.
“It got to the point where I was afraid to answer my phone or door because I had so many creditors,” said Tracy Kiehl, a Spokane woman who asked Consumer Credit Counseling for help. “I kind of stumbled into all of this. It seemed really easy. I was getting all these things I wanted and I wasn’t having to pay for it.”
Kiehl started with a $20,000 debt and through the counseling organization has now reduced it to $10,000.
Hayes said she has noticed certain trends in the high 1995 numbers.
“Some of the types of credit offered are new and unique and many people are unskilled in understanding it all,” she said.
For example, some institutions will send a check for $1,500 to a person. The person then cashes it but doesn’t realize how high the interest attached to it will be, she said.
Hayes also noticed more people using credit cards to supplement daily living expenses. Instead of merely using the cards to buy large items or for emergencies, people are using them to pay for groceries and other necessary items, she said.
“It’s not a growth in people needing (financial guidance), it’s a growth in people admitting they need it,” said Jeff Wordell, president of 21st Century Financial Services Inc. in Coeur d’Alene. “In the 1980s, the phrase was ‘charge it.’ The phrase for the 1990s is ‘bankruptcy and starting over.”’
The number of bankruptcy cases filed in Idaho jumped from 3,303 in 1994 to 4,059 in 1995, according to the U.S. Bankruptcy Court in Boise.
“People are starting to become overwhelmed with their debts,” said Wordell, “It’s starting to take its toll.”
Idaho also carries one of the heaviest credit card debts in the nation. According to a study from CardTrack of American Inc, Idaho residents carried a credit card debt of $1.6 billion. That is $1,600 per person - ranking Idaho sixth in the nation for per household credit card debt.
Consumer Credit Counseling offered counseling once a week in Coeur d’Alene for several years. But by April 1995, it had increased its services to five days a week because of the need in Idaho, Hayes said.
The agency is now planning to offer one day of counseling a week in Sandpoint by March and a day of counseling in Kellogg by the end of the year, Hayes said.
, DataTimes