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Money Sense: Got Debt?
Tips to finding a sound counselor
source

October 10, 2007--Managing credit and keeping debt to a minimum is a key element of our ability to transition from a struggling consumer to a successful wealth-builder. That's why I often recommend that people who are struggling with debt seek credit counseling before they do something out of desperation—such as file for bankruptcy—unnecessarily or prematurely. In fact, one of the major components of the recent changes in the bankruptcy law is that credit counseling is now required before a bankruptcy can be filed.

However, it is often difficult to tell the difference between legitimate, not-for-profit counseling agencies and those focused on taking advantage of your desperation. Some may want to simply separate you from your money without solving your debt problem at all. When looking for a credit counselor, you'll do well to watch out for the following red flags:


Educational materials are unavailable or only available for purchase.
The organization pushes debt management plans as your only option, without offering such services as budget counseling or debt management classes.
The agency's employees are paid based on how many people they get to buy or sign-up for services.
The counselors are not accredited or trained by an independent, outside organization.
The credit counselor refuses to help you because you can't afford to pay.

Go to the National Foundation for Credit Counseling Website to find a NFCC member agency in your area. You may also want to check out the U.S. Federal Trade Commission's Website. This site will help you find reputable credit counselors and debt management programs, as well as offers you more tips to avoid the scammers.