The Consumer Credit Counseling Service of Maryland is one of a network of non-profit groups throughout the country that help people straighten out their finances.
These non-profit services are supported primarily by the big credit companies, which stand to benefit by recovering payments from consumers that could otherwise be lost. Last year, for instance, the CCCS of Maryland returned $7.5 million to creditors through individual debt repayment programs. For 1990, CCCS estimates the total will reach $9.8 million.
Affiliated with the Silver Spring-based National Foundation for Consumer Credit, CCCS of Maryland operates eight offices: These include three in the Baltimore area -- at Catonsville, Highlandtown and Perry Hall -- and others in Bel Air, Laurel and Salisbury as well as in Newark and Wilmington, Del. The telephone number for a referral to one of the offices is 747-6803.
The CCCS of Southeast Maryland Inc., a separate affiliate of the national foundation, covers Anne Arundel County. Phone 544-9666.
Despite their financial support, credit companies do not control the state CCCS, said John Gengler, education director. The national foundation's bylaws stipulate that creditors can make up no more than 40 percent of an affiliated organization's board, he said.
"They don't dictate to us," Gengler said.
Other members include representatives of major corporations, social agencies, education institutions, credit-reporting firms and the state government.
A statistical profile last year showed an average client age in the early 30s and an average debt of nearly $22,000. Through November of this year, 7,167 people had met with counselors at CCCS of Maryland. Of those, more than 3,497 have been put in formal debt repayment programs, up from 2,640 last year.
"We don't put everybody in a program," Gengler explained, adding that many people can bail themselves out after just one session in which a counselor may point out where expenses can be cut and help set up a household budget.
Although CCCS will counsel anyone, there are some whose predicaments are too deep.
"Twenty-two percent of the people we can't help," said Russ Bohlman, executive director. "We tell them up front because we can't set up a program that's fair and equitable to creditors."
The problem in these cases, Bohlman said, is that there's not enough income to pay the bills even if payments are reduced. CCCS never recommends bankruptcy, which it considers a legal matter.
"We tell them to get a lawyer," Bohlman said.
And then, Bohlman added, "there is a segment of people who are crazy."
Gengler also pointed out that the CCCS is not a collection agency or a "credit-repair" firm, which often charges people hefty fees to "fix" their credit problems.
"People don't have to pay $99 or $199," he said. "The ones who get hurt the most are the ones that can least afford it."
Gengler also cautioned against debt consolidation loans as a way out.
"The problem with that is they owe 10 companies and they can't pay it. So they get a debt consolidation loan. But what they do is keep the 10 credit cards," with predictable consequences, Gengler said.
CCCS does ask those in a formal debt-repayment program to pay a $5 monthly fee to help cover the cost of postage, etc. If the fee becomes critical in the financial balancing act, or if clients object, it is waived. Most people want to pay, Gengler said.
When a person calls CCCS for an appointment, he is asked to bring in all of his bills, including those for insurance, utilities and mortgage, as well as income documentation. He then meets with a counselor, who sorts through the financial records and figures out what the person needs to do.
Often it's as simple as setting up a budget.
"Ninety-eight percent of the people I talk to never have a written budget," Gengler said. "It's because we lack discipline or it's too much effort . . . the main reason is we really don't want to know.
"Once they get it down on paper . . . then certain things become possible."
If the situation is more serious, people are placed in a voluntary debt repayment program. In such a program, a budget is worked out and the person agrees to send a specified amount of money each month to CCCS, which deposits it in a trust account.
Once the first remittance is received, CCCS notifies the person's creditors about the proposed repayment plan.
"The creditors will stay off their backs if they commit to the program," Bohlman said.
Usually, in fact, creditors stop any late fees or added interest charges.
CCCS then distributes the monthly remittance among the creditors until all the debts are paid. During that period, the client forgoes the use of credit.
A client can remain in a program for as long as 42 months, although 18 months is average.
CCCS also operates programs in schools and the workplace to prevent people from landing in the financial soup.
"Half our job is to keep people from coming in to begin with," Gengler observed.
But, Bohlman said, once problems exist, the worst thing people can do is ignore them.
People may be reluctant to come in because they often feel like they've failed, he said. But the biggest obstacle to seeking help, he added, is fear.
"We are here to help anybody with their finances," he said. "We'll try to help them out."