If creditors handle this appropriately, there could be more people helped with debt management programs - but they will need that break on principal,

That's not true of ethical agencies. Any ethical agency will check what brought an individual into debt and perhaps refer that person to a bankruptcy lawyer or to a local bar association.

We expect that many of these people will be in very deep trouble by the time they come to us,

will harm a lot of individuals who need a new start.

The ongoing task of debt management for the federal government will clearly be very different in the years ahead than it has been in the past, when debt was rapidly increasing, ... With $3.6 trillion in debt outstanding, even a 3 basis point (0.03 percentage point) reduction in federal borrowing costs will ultimately produce savings of more than $1 billion per year.

Many people, with good counseling, can find alternatives to bankruptcy.