CHECKING OUT COUNSELORS OF CREDIT

January 14, 2008 By Tisha (Kulak) Tolar

Every morning, I turn on the radio and hear at least one commercial announcing a phone number for a debt solution counseling company. Many days it’s never the same company being advertised though each promises to get you out of debt in what sounds like an instant. How can you be sure? How can you know who to trust?

Already being in debt and then being taken for a ride by some fly-by-counselor would be utterly devastating to both you and your financial situation. It is essential you do your homework before you commit to any credit counseling company. The first step is to check out the US Department of Justice website. They provide a list of companies who are approved to assist client with their debt. All counselors who are on the approved list must be non-profit organizations and are subjected to criminal background checks. They must also comply with governmental training and experience guidelines in order to be placed on the list. Included in the governmental guidelines is a company’s requirement to be bonded, or carry insurance in the event a company employee causes you to lose money because of their own mistakes or criminal intentions.

When contacting a credit counselor for an initial consultation, keep your ears open for some red-flag warning signals during their pitch. Any company who tries to force you into committing to a payment plan outright should be a warning. Legitimate counselors should want to help you explore all of your options, including the option to reduce your debt on your own by altering your budget. A counselor’s goal should be to initially go over every detail of you finances and then help you decide which method would work best for you. Imagine someone forcing you into declaring bankruptcy, when in reality all you had to do was simply adjust your budget.

Counselors who charge upfront fees that seem ridiculously high should be more-carefully evaluated. Many companies will require a monthly processing fee ($25 is average) and some charge a nominal set-up fee to get you started. A good way to reveal a dubious company is if you state you can not afford the fees and they immediately turn you away. The dishonest companies will also require a large sum payment in order to move forward with the company. On average, any company you deal with who has a fee over $50 on a monthly, administrative basis, should be considered and researched carefully.

For a list of reputable, approved counseling companies, visit the US Department of Justice at http://www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm.

Fed up with scraping the pennies together at the end of the month? It’s time to get impartial debt advice from professionals in debt management to help you get out of debt through an IVA, a consolidation loan or another debt solution tailored to your money needs.

Posted in budgeting, debt, financial planners, financial plans, financial problems, money, personal finance, personal finance basics, scams

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