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How will you select the right debt counseling agency?

Debt counseling has helped many debtors get out of debt. It is an effective means of finding out alternatives to filing bankruptcy. So, if you visit a debt counselor you can explore the various options that can make you debt free. How effectively a debt counseling session works for you is also determined by the debt counseling agency you choose. There are instances when debtors have consulted credit counselors but failed to derive any benefit from them. This is because the debt counselor may not have been the right choice. To add to the woes of the debtors, it has been reported that many debt counseling agencies have rubbed shoulders with debtors the wrong way.

The BBB has requested consumers to watch out for the following prior to selecting a debt counseling agency.

  • Watch out advertisements

A good debt counseling agency will not flaunt its services or send emails and notifications to consumers in their mail box. You get to know a good credit counseling agency mainly through referrals.

  • Compare agencies

You can ask your friends that have benefited from the services of credit counseling firms. These days most of the credit counseling firms have websites and you can compare services offered and rates of different service providers.

  • Check accreditation

There are many states that require credit counseling agencies to be licensed before they can offer their services. Check if the debt counseling agency you are planning to hire is registered and fulfills the norms of the state.

  • Are the credit counselors qualified?

Avoid hiring services of a credit counselor that is paid fees through commission. They should be paid by an outside organization. The credit counselors should also be qualified.

  • Is your personal information kept confidential?

The company you are choosing should have a privacy policy. Your personal information should be kept confidential.

  • Find out if the services offered are tailor-made?

It is a well known fact that no 2 debtor can have the same solution since the outstanding debt handled by an individual varies greatly. So, avoid hiring a debt counseling agency that doesn’t offer customized solutions.

  • Check past track record

Try to find out the number of drop outs and reputation of the debt counseling agency. The number of complaints lodged against it is also an important measure of the credibility of the credit counseling agency.

  • Fees

Get a fees break up when you are enrolling for the debt counseling program. You may have to pay set-up fees and monthly service charges. You should not be charged more than USD$75 and USD$40 as set-up fees and monthly service charges respectively.

Debt counseling has been made mandatory as per the new federal bankruptcy laws. However, you have to take these credit counseling sessions from a credit counselor who is approved by the government.

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