One year after the implementation of bankruptcy reforms, credit counselors are finding that consumers contemplating bankruptcy are in such dire financial condition that bankruptcy is their only option, and many are delinquent on their mortgage, according to a survey by the National Foundation of Credit Counseling.On average, consumers signing up for pre-filing counseling have unsecured debt that exceeds their annual income by $11,600. The NFCC also noted that 42% of the credit counseling agencies in the survey reported that 26% to 100% of their pre-filing clients are delinquent on their mortgage payments. (In passing bankruptcy reform, Congress mandated that consumers receive credit counseling before filing for bankruptcy protection.) Bankruptcy filings are estimated to total 600,000 this year, which would be the lowest level in 20 years. However, filings are increasing each month and some estimate it will cross one million in 2007-- due to energy prices and the resetting of adjustable-rate mortgages, according to the NFCC report.

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