The Financial Planning Association on Monday called on Congress and President Barack Obama to raise the country's debt ceiling to protect America's bond rating and to avert a serious blow to the U.S.  economy.

FPA executive director and CEO Marvin W. Tuttle Jr. said that without such action, the U.S. risks defaulting on $30 billion in short-term debt set to mature Aug. 4.

If the U.S. defaults on its financial obligations, Tuttle said it will seriously jeopardize the country's economic growth.

Tuttle said he has requested Congress and the President to "take serious and substantial steps now to address our nation's grave fiscal imbalance."

A downgrade likely would lead to higher interest rates for the federal government, increasing the amount of money required to service the nation's debt and exacerbating budget issues. Individuals with adjustable rate loans could quickly face higher interest payments on credit cards or adjustable-rate mortgages.

In addition, new loan products for fixed-rate mortgages, and auto and student loans would have higher rates, diminishing individual's purchasing power. Beside the direct impacts on consumers, a default could further erode Americans' confidence in financial markets.

The FPA is the largest membership organization for personal financial planning experts in the U.S.

Tuttle said the two largest credit rating agencies have already said that the nation's bond rating is under review for possible downgrade, FPA officials said.

"Failure to raise the debt ceiling most certainly will lead to higher interest rates for American consumers and less capital available for small business," Tuttle said.

FPA officials say economists are uncertain of the specific outcome of a default but widely agree that there would be large-scale disruptions to the credit and stock markets. Such a disruption - -along with the uncertainty caused by the nation's increasing debt load -- would present a serious challenge for financial planners and their clients.

"No financial planner would advise a client with a debt problem to get a larger line of credit without having a commitment and a plan to address the underlying problem," Tuttle said.

- Jim McConville