Debt Counseling - Don't Fall for the Scams

If you are overwhelmed and decide to seek the services of a debt
counseling agency, make sure you find a good one. 

Before we delve into this topic, let me say that every trade has
good people and bad people. Unfortunately, some debt counseling
agencies give the good ones a bad name. With that said, there
are PLENTY of legitimate Debt Counseling organizations that will
help you manage your money and develop a budget that is suitable
to your situation. 

The first thing to do is RESEARCH. Look for a debt counselors in
your area of residence that will work with you face-to-face. You
may want to check with the State Attorney General or the Better
Business Bureau (BBB) to get a sense of their reputation. Both
sources can tell you if complaints have been filed against the
counseling agency.

The FTC recommends asking questions such as the following, when
looking for a good credit counseling service:

 · What services do you offer? 

Stick with debt counselors who offer a full range of services
including budget counseling, savings and debt management
classes. Avoid organizations that do not encourage you to analyze your
current debts or financial situation. This is important as
we discussed in step #4.

· 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.

· Will I have a formal written agreement or contract with you?
Do not 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?

· What assurance do I have that information about me (including
my address, phone number, and financial information) will be
kept confidential and secure?

 In addition, avoid organizations that promise to: · guarantee
they can remove your unsecured debt 

· promise that unsecured debts can be paid off with pennies on
the dollar 

· claim that using their system will let you avoid bankruptcy 

· require substantial monthly service fees 

· demand payment of a percentage of savings 

· tell you to stop making payments to or communicating with your
creditors 

· require you to make monthly payments to them, rather than with
your creditor 

· claim that creditors never sue consumers for non-payment of
unsecured debt 

· promise that using their system will have no negative impact
on your credit report 

· claim that they can remove accurate negative information from
your credit report.