Debt Settlement Industry - Public Workshop #536796-00004

Submission Number:
Robert Manning
Rochester Institute of Technology
Initiative Name:
Debt Settlement Industry - Public Workshop
Dear FTC Staff, In developing this alternative to debt settlement and consumer bankruptcy, both consumer and creditor concerns are addressed. The key is the transparency of the estimation of how much debt can be repaid (unlike debt settlement that does not have a "means testing" requirement) and the fact that consumers retain control over their escrow accounts and do not pay high set up fees. Furthermore, consumers are not accepted into HOPE's partial-payment "Responsible Choice" program unless their creditors are willing to accept the debt concession at the beginning of the RDR program. Hence, those who will have trouble completing the Responsible Choice plan are referred to bankruptcy counsel and will not incur expenses during the course of the qualification phase of the HOPE partial-payment program. In fact, the initial consumer debt capacity assessment that is conducted by counselors over the telephone is free--regardless of whether the consumer enters into a CCCS plan, partial-payment plan, or bankruptcy. Attached is my first article on the RDR program which is now legally operational in 25 states with our CCCS partner, InCharge. I believe that the model that we have developed will help in establishing the "best practices" of this rapidly growing and necessary industry. The key is to help both consumers and creditors with a standardized assessment program that is applicable and scaleable across the US while eliminating the industry's "bad apples." A recent article at summarizes the RDR system. I look forward to discussing how the innovations offered by the Responsible Debt Relief program will transform and professionalize an industry that is in dire need for regulation. Sincerely, Robert D. Manning Research Professor and Director Center for Consumer Financial Services E. Philip Saunders College of Business Rochester Institute of Technology 107 Lomb Memorial Dr Rochester, NY 14623