Resolving to go debt-free is a great way to start the new year. Be careful where you go for help, though. You can find reputable help that's free or doesn't cost a lot.
Looking for help with debt? You are not alone. Nearly a fifth of Americans with debt told pollsters recently that they expect to die in debt.
Although most Americans don’t carry a balance on credit cards, about 38 percent of us do. Those carrying a balance in 2013 owed a median (half owed more, half less) of $2,300, according to the Federal Reserve’s Survey of Consumer Finances.
This year will be different
Perhaps you’ve decided this is the year when you are going to turn your debt picture around. In the video below, Money Talks News founder Stacy Johnson explains that, to make good on that resolution, you may benefit from expert help. After you’ve watched it, scroll down to learn more.
Fortunately, there are many excellent, trustworthy credit counseling agencies able to help. Unfortunately, it’s too easy to stumble into the hands of a bad “adviser.” The so-called debt settlement industry is poorly regulated and rife with problems.
Beware bad actors
In a column in the Delaware County (Pa.) News Network, Markita Morris-Louis, an attorney for a Philadelphia-based nonprofit that helps consumers with debt and financial problems, writes:
Lured by promises to reduce their debt loads by 50 percent, debt-burdened consumers often turn to debt settlement companies to help them lower the balances they owe to creditors.
Unfortunately, customers of debt settlement companies often achieve little relief, and far from becoming debt-free, many end up in worse financial condition.
The federal Consumer Financial Protection Bureau explains how to tell the difference between a credit counselor and a debt settlement company.
Find trustworthy help
To be safe, get financial counseling from a nonprofit agency. Here’s where to find one:
- The National Foundation for Credit Counseling is a national network of agencies that are vetted and accredited by the Council on Accreditation. The foundation’s agency locator shows local, regional or national organizations operating near you that provide credit, debt and budget counseling in person, online or by phone. You can get started by submitting information online.
- The Association of Independent Consumer Credit Counseling Agencies represents independent nonprofit agencies providing credit counseling and debt help to consumers. The agencies are accredited by the Council on Accreditation. Find a member agency here.
- Other sources of help. The Federal Trade Commission says:
Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.