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Proceed with caution if your debts are crushing you. Experts say there are reputable credit-counseling groups out there, but the field is also crowded with scammers. These sites will point you in the right direction and may even help you to negotiate on your own with creditors.
FTC. The Federal Trade Commission's "facts for consumers" page on choosing a credit counselor is a good place to begin. It suggests questions to ask a prospective debt counselor, and it outlines what a debt-management plan is. A section called "tipoffs to rip-offs" could save you much grief. Among the tips are warnings to "steer clear" of companies that charge big fees, "guarantee they can remove your unsecured debt," or "promise that unsecured debts can be paid off with pennies on the dollar."
http://go.philly.com/ftccredit
Agency lists. Find a list of "approved" credit-counseling agencies at this site of the U.S. Trustee Program, part of the bankruptcy bureaucracy at the U.S. Department of Justice. You can search by state, though many of the agencies that it shows won't be local. A separate search will identify agencies according to the languages in which they can provide assistance.
http://go.philly.com/dojcredit
Money central. "Credit counselors are falling all over themselves to help you out of debt, but some do more harm than good," begins this article at MSN's money site. Still, warning signs that you need some help should lead to action. Those signs include being consistently late in paying one or more of your regular bills, and being hounded by creditors. Author Liz Pulliam Weston strongly recommends counseling firms that are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
http://go.philly.com/msncredit
Alerts and advice. The National Foundation for Credit Counseling provides consumer tools that include calculators and a budget worksheet. Consumer-alert videos add to warnings of the high fees from some debt-settlement companies and remind people that often debtors can get a better deal on repayment terms by negotiating on their own with their unpaid creditors.
And here's the site of the Association of Independent Counsumer Credit Counseling Agencies, which has links to its member agencies.
Contact staff writer Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.
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