#credit counseling agencies
Choosing A Consumer Credit Counseling Agency
Living paycheck to paycheck? Worried about debt collectors? Can t seem to develop a workable budget, let alone save money for retirement? If this sounds familiar, you may want to consider the services of a consumer credit counseling agency. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware – just because an organization says it is nonprofit doesn t guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make voluntary contributions that cause them to fall deeper into debt.
Most credit counselors offer services through local offices, the Internet, or via telephone. Some people prefer face-to-face counseling, so choose what is right for you. Your financial institution, local consumer protection agency, and friends and family may also be good sources of information and referrals.
Finding a Reputable Consumer Credit Counseling Agency
Reputable consumer credit counseling organizations advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
A reputable consumer credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn t do that, consider it a red flag and go elsewhere for help.
Once you ve developed a list of potential consumer credit counseling agencies, check them out with your state Attorney General, local consumer protection agency, and Better Business Bureau. They can tell you if consumers have filed complaints about them. (But even if there are no complaints about them, it s not a guarantee that they re legitimate.)
The United States Trustee Program also keeps a list of consumer credit counseling agencies that have been approved to provide pre-bankruptcy counseling. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust. After you ve done your background investigation, it s time for the most important research – you should interview the final candidates.
Questions to Ask
Here are some questions to ask to help you find the best consumer credit counseling agency for you. These questions come directly from the FTC :
- What services do you offer? Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.
- Do you offer information? Are educational materials available for free? Avoid organizations that charge for information.
- In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future?
- What are your fees? Are there set-up and/or monthly fees? Get a specific price quote in writing.
- What if I can t afford to pay your fees or make contributions? If an organization won t help you because you can t afford to pay, look elsewhere for help.
- Will I have a formal written agreement or contract with you? Don t sign anything without reading it first. Make sure all verbal promises are in writing.
- Are you licensed to offer your services in my state?
- What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, by whom? If not, how are they trained? Try to use an organization whose counselors are trained by a non-affiliated party.
- What assurance do I have that information about me (including my address, phone number, and financial information) will be kept confidential and secure?
- How are your employees compensated? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization? If the answer is yes, consider it a red flag and go elsewhere for help.
Now that you have this information in hand, you can make an informed decision about which credit counseling agency is the right fit for you. Best of luck in your search! And of course, we invite you to learn more about us.