New debt relief legislation mandates that debtors who intend to file for debt relief must see credit counselors first. The required credit counseling requirement for those seeking bankruptcy is bringing about a number of difficulties that have yet to be straightened out.

The new law says that counselors must be approved by the US Trustees, and the total number of professionals authorized so far is relatively few, making it tough for debtors to obtain the required counseling. The new law demands that anyone who wants to apply for bankruptcy must first submit to credit counseling, which might seem like a great idea, as few people have any formal monetary training. While the law has not worked as intended, Americans are still being forced to jump through the hoops that Washington has created.

Here are a couple of the problems that have sprung up so far:

Fee issues - A payment of $50 is far less than most counselors were requiring before the enactment of the law. The law requires that debtors who cannot afford to pay for their counseling be permitted to get it at no charge, which is harming the counseling agencies. Fee guidelines are still all over the place as counseling agencies try to determine how they can manage larger numbers of consumers for less money then they were previously receiving. The US Trustees did not prepare a payment schedule, but did "suggest" that a top charge of $50 might not be unreasonable.

Illegal headaches - A few dozen less than honest agencies have been shut down by the Federal government, with more to come. A few unscrupulous businesses have been enrolling their clients in debt management programs that are adding to the companies' bank accounts and sending the clients further into financial trouble. The Internal Revenue Service has been looking into a number of allegedly "non-profit" agencies that were actually only diverting money to profit-seeking affiliate businesses.

Counselors are overworked - Rather than in-depth, personal financial education and assistance, applicants are rather having to do it on the phone because of personnel shortages. Some agencies are providing assistance via the Internet, using computer programs that simply include completing a survey. The relatively small number of approved counselors has put a burden on the agencies. Those bankruptcy filers who do receive personal assistance are getting mostly an admonishment not to "spend more than you earn."

In an ideal world, Congress would realize that the entire Bankruptcy legislation was useless and repeal it. It will be great if the Trustees can clear up the difficulties soon, as individuals with problem debt need the assistance. In time, the difficulties with required financial guidance will all sort themselves out.