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Bankruptcy Lawyers Try to Spread Financial Literacy

April was declared "Financial Literacy Month" in the United States.

The number of foreclosures and people filing bankruptcy continue to increase as the months pass.

Credit card debt is on the rise.

In light of such powerful evidence, few people can argue that American citizens need help understanding and handling money. And at last, it seems that groups are beginning to offer such help.

Programs like C.A.R.E. (Credit Abuse Resistance Education), which was started by a New York bankruptcy judge in an effort to help the nation's students become more familiar with the cost of credit and how to use it wisely, have sprung up in all 50 states.

And educators are reportedly optimistic about the impact they'll have on kids.

Boston.com reports that students in Massachusetts are benefiting from a five-session program taught by bankruptcy lawyers and other attorneys with a background in financial issues.

The first four sessions evidently take place in the classroom, and the last one occurs in bankruptcy court.

During a mock bankruptcy trial, students get to watch a "bankruptcy petitioner" testify in front of a judge about the specifics of his debt. Apparently, the concrete approach works.

Several students mentioned in interviews that they intended to stay away from credit card debt, despite how readily available it was made to them.

Like many Americans, students interviewed by Boston.com reported receiving credit card applications in the mail as soon as they reached their 18th birthdays.

And many of the students, it seems, knew about the problems of credit card debt firsthand from family members' struggles.

In fact, the bankruptcy judges and lawyers in charge of the financial literacy program have emphasized teaching money smarts to students from lower-income families.

It's these students, who don't have the safety net of parents' wealth, who can be most badly damaged by debt and credit problems early in life.

Judge Nifo, founder of C.A.R.E., points out the immediate dangers of getting into debt young. Sources indicate that students who max out credit cards from offers they receive in high school or college can be rejected for student loans, car loans, apartment applications, grad school applications and even jobs.

These restrictions are frightening, especially considering that a recent article in The Economist found that fewer than 17% of American students have ever participated in a financial literacy class.

Programs like C.A.R.E. and others around the country are reportedly designed to fill the so-called knowledge gap by providing students with a reasonable understanding of financial issues.

For more information on personal finance, visit Total Bankruptcy's financial literacy section.

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