5 things to know about credit counseling

The Savage Truth

American consumers’ financial problems are not over. There is still nearly $1 trillion in consumer debt outstanding. There are still nearly a million personal bankruptcies every year. And there are still people who can’t refinance their mortgages, either because they don’t have enough equity or because they have bad credit.

In other words, there are plenty of people who need help dealing with debt and managing their money. Whether because of job loss, illness, uncovered medical expenses or divorce, there may come a time when you (or someone you love) simply cannot pay the bills. Or perhaps you never learned money management tools and want to avoid debt problems proactively.

That’s where credit counseling comes in. You know you need help, but who can you trust? And how can you avoid the rip-offs that prey on people struggling with debt? There are two major associations of credit counseling agencies that you can trust. They are the National Foundation for Credit Counseling (www.NFCC.org or 800-388-2227) and the Financial Counseling Association of America (www.FCAA.org or 866-6947253). Each of these organizations has local member agencies that must adhere to the highest standards of credit counseling. And that’s where your search for nearby help should start.

Here are five things you should know about credit counseling.