Choosing a Credit Counselor

Bankruptcy Alternatives: Choosing a Credit Counselor

With consumer debt at an all-time high, many organizations are marketing solutions such as credit counseling and debt negotiation programs as alternatives to Bankruptcy. The challenge for the consumer is to determine which of these organizations are reputable and can deliver the benefits they promise.

The amount of debt you have may be manageable with some guidance from a professional such as a credit counselor. A reputable credit counseling agency wants to help you take charge of your debts just as a reputable bankruptcy lawyer does. If the credit counselor feels that your debt load is unmanageable for you and cannot formulate a successful debt management plan (DMP), they will refer you to a reputable bankruptcy law firm and vice versa.

If you feel you can afford to pay your creditors in full and just need a payment plan you can afford and wish to avoid bankruptcy, give credit counseling a try. If you feel that your debts are simply unmanageable given your present income, feel free to contact my office or call me at 313-962-4656 or 888-4Walter.

Questions to ask a potential credit counselor:

What services do you offer?
Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.

Do you offer information? Are educational materials available for free?
Avoid organizations that charge for information.

In addition to helping me solve my immediate problem, 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.

What if I can't afford to pay your fees or make contributions?
If an organization won't help you because you can't afford to pay, look elsewhere for help.

Will I have a formal written agreement or contract with you?
Don't 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?
Try to use an organization whose counselors are trained by a non-affiliated party.

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

How are your employees compensated? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?
If the answer is yes, consider it a red flag and go elsewhere for help.

Need help? Have questions about bankruptcy or credit counseling? Contact my office.