Almost anyone can get into financial trouble.
No one knows that more than Suzanne Boas, who for nearly two decades has guided a non-profit agency that tries to help thousands of distressed consumers each year.
In this economic meltdown, however, the clients are different — and so is Boas and her agency.
“The problems we’re seeing are far, far deeper than anything we’ve experienced before,” said Boas, president of Consumer Credit Counseling Service of Greater Atlanta.
From mounting credit-card debt to foreclosures and bankruptcies, a few stats tell the story:
– In 2008, CCCS conducted 193,000 bankruptcy counseling sessions — a 70 percent increase in two years. Housing counseling skyrocketed eight-fold to nearly 73,000 sessions. And budget counseling rose to nearly 77,000 sessions, a 64 percent increase in two years.
– The people in trouble earned considerably more money than in the past. Those who received foreclosure counseling this year had an average gross income of $51,000 — up from $39,800 two years ago. Those receiving bankruptcy assistance earned an average of $42,600 this year, an increase of $8,000.
– But net worth plummeted, often because of falling home prices. So consumers had fewer resources to get themselves out of a hole. Those receiving foreclosure assistance had a negative net worth of $102,000 this year. Two years ago, their net worth was a positive $23,500.
To help consumers deal with these issues, CCCS has grown to 580 full-timers — double the number from 18 months ago. When Boas started 18 years ago, there were 35 employees.
There’s one other noticeable change. In Boas herself.
She generally has been reluctant to share her personal feelings. But she was clearly upset with what has been happening to consumers when I sat down with her last week. I’ve known her for her entire tenure at CCCS, having covered personal finance and real estate when I started reporting for the paper 19 years ago.
“There are many horror stories that our counselors are having to deal with every hour, every day,” Boas, 63, lamented. “I will always be a free-market advocate. But it saddens me that there is such a greedy underbelly to our economy.”
It’s more than just the unprincipled mortgage lenders who roped unsuspecting borrowers into products that would clearly throw them for a loop, she said.
Consumers are constantly getting targeted, sometimes by for-profit companies in her own credit-repair industry. Some of those companies charge hefty up-front fees — in the thousands of dollars — to consumers who could better use that money to pay bills. By contrast, most CCCS services are free. The few that charge have nominal costs.
Boas knows that greedy business people are only part of the problem. Many consumers have created their own messes, spending a lot more than they had.
“Americans have become increasingly comfortable living closer to the edge,” she said. Recently, however, there has been a hopeful sign as consumers save more — a trend Boas hopes is permanent.
“I don’t want my children to have to take care of my generation if we haven’t learned something from this,” she said.