"Vote of Confidence" for Debt Relief Program

By Rachel Ward

Rochester, NY – A local consumer credit expert has developed a new way for consumers who are deep in debt to climb out.

Bob Manning, author of the book "Credit Card Nation," unveiled the non-profit "partial repayment" system last week.

The program uses an algorithm to determine how much debt consumers can afford to pay back, based on factors like taxes and expenses
The system gives banks a better estimate of how much they have to write off when consumers can't pay, and Manning says the idea is getting applause from federal officials and attorney generals across the country.

"We have gotten an extraordinarily strong vote of confidence that this could be one of the few proposals ... that could actually improve the health of banking without any federal subsidies, and can increase the ability of people to get out of debt and start buying goods and services again."

Manning says the non-profit credit counseling firm that's administering the program is currently licensed in 22 states, including New York. He's hoping to expand the program across the entire country in the coming months.

Manning says partial repayment is a better alternative to personal bankruptcy when consumers can't fully repay their debt, because banks net more cash from partial repayments than they do from writing off their losses.

That helps boost their capital levels, so they have more funds to lend out to small businesses and home buyers.

Manning says right now he's working with only one non-profit debt counselor on the project, but he's hoping to expand the partial repayment strategy to more firms.

He says the goal is to put unscrupulous debt relief companies out of business.