Groups Offer Services to Stave Off Bankruptcy

When you’re broke, your options never seem very bright. But there are some alternatives to declaring bankruptcy.

Southern California Debtors Anonymous is a 12-step recovery program similar to Alcoholics Anonymous or Overeaters Anonymous.

The organization views “compulsive debting”--its term for out-of-control spending on credit--as a disease and an addiction. The only requirement for membership is a desire to stop incurring unsecured debt. Recovery is measured by getting and staying out of debt and is based on abstinence (not using credit cards or borrowing money), attending meetings to share experiences with others and keeping careful track of daily expenses.

In addition to meetings and support, the organization helps its members devise a reasonable spending plan and an action plan for resolving their debts. There is also a separate program called Business Owners Debtors Anonymous for people who have their own companies but can’t control their debt spending. For information on meetings in Orange County, call (310) 855-8752.

Another community resource for people who feel that they are sinking financially is the Consumer Credit Counseling Service of Orange County. The service offers free financial counseling and help with budgeting. In addition, it offers a debt-management program for those people who want to repay their debts but don’t have enough money to meet their existing payments.

Counselors work with the client and creditors to work out a lower monthly payment schedule. The client gives the money to the counseling service, which in turn disburses it to creditors. For their part, creditors agree to stop all collection efforts.

Clients typically repay all their debts within four years. The counseling service charges a fee for the debt-management program of 6.5% of the total monthly distribution to creditors up to a maximum of $20 a month. The money goes to offset proposal letters, the client’s monthly statements and service by account managers. For more information, call (714) 544-8880.

Yet another place to turn is the California Small Business Development Center Program sponsored by the Small Business Administration, the state community college system and the state Department of Commerce.

The center can help entrepreneurs develop realistic business plans. It also advises established small businesses on marketing, growth management and financial planning, including helping businesses find financial resources. Services are free. For more information, call (714) 647-1172.