If you have ever gotten into financial trouble, or just run up some debts that are becoming a strain to pay back, you may have spoken to a debt counseling service. Their offer, of reducing your monthly payments to a manageable level may sound like salvation. They may even offer to wipe out your debts without impacting your credit.
Furthermore new laws may require credit counseling before they will allow a bankruptcy. Debt counseling agencies have begun popping up everywhere, and they have certainly gotten more aggressive! You may be solicited for debt counseling over the phone or through email even if you never requested this service.
However debt counseling services are not federally regulated, and only seventeen states have passed regulations which specifically apply to debt counseling services. When you are solicited for debt counseling services, how do you know that your are entrusting your financial life to a reputable and competent company?
Tips for Picking A Great Debt Counseling Service
Look for membership in the National Foundation of Credit Counseling (NFCC). This is a fifty year old agency that has very strict accreditation standards.
Never give your social security or credit card information out to anybody over the phone, especially if it is an unsolicited phone call. Scammers just love the tactic of posing as debt counselors in order to obtain information for identity theft.
Do not be mislead by the ?non-profit? designation. It really is meaningless in this case.
Do not agree to high fees. You can certainly shop around to get an idea of the range of prices in your area. Again, the NFCC should point you in the right direction.
Check out DebtAdvice.org for NFCC Authorized Debt Counseling Companies in your own area.
Choose Your Debt Counseling Wisely
Debt Counselors can salvage your financial life, and allow you to start fresh. However, some bad apples can actually make your situation worse. Before you agree to a payoff plan which could stretch over many many months, or even years, please do your homework. Before you hand over that first check, or before you sign anything, make sure you are teaming up with a reputable agency.
M Katz is a financial professonal, and she is interested in helping consumers. Please visit The badcreditblues.com/credit-news/ Bad Credit Blues for help avoiding scams and improving your credit.
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Source: http://www.story-of-finance.com/credit-counseling-services-the-good-the-bad-and-the-unregulated.html
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