Resolutions 2018: Finding the Right Financial Help

Millions of Americans are drowning in credit card debt. If you are among them, you might benefit from expert help.

A credit counselor can stand between you and your creditors, negotiate lower rates and payments on your behalf, and help craft a plan to pay down debts.

Unfortunately, the debt settlement industry is poorly regulated and rife with problems. Some clients find that debt settlement companies do not help them find relief, and can actually put them in an even worse financial situation.

Find help for common financial problems in our Solutions Center!

To avoid such trouble, the safest bet is to get financial counseling from nonprofit agencies such as:

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.

What to expect

Trustworthy credit counseling agencies will help you pay off debt, and establish and keep good credit. Their counselors sound like counselors, not salespeople. They’ll help you set up a budget.

With debt management plans, you may even have fees waived and interest rates and monthly payments reduced. But counseling agencies can’t reduce the balance — the total amount — of debt you owe.

The NFCC explains in detail how to assess a debt-management plan and a credit counselor. Make sure any debt-management plan includes all your debts, and that the company commits to providing you with regular reports on your accounts.

When shopping for help managing your debts, look for:

1. Free or low-cost counseling

Many nonprofit credit counseling services provide free advice about credit, debt and budgeting.

There’s no reason for an agency to charge you high fees. For example, GreenPath Financial Wellness, an NFCC member, charges a one-time setup fee of zero to $50, and monthly fees averaging $36 for a debt management plan.

The company should not give you the runaround when you inquire about costs. And agencies should waive fees if you have serious financial hardship.

2. Free information

There should be no charge for learning the key details about an agency and its debt management plans. Also, don’t surrender personal details to get information about a company or its fees.

3. A variety of services

Stay away from businesses that only offer debt services. Also, steer clear of companies offering debt-reduction plans. Trustworthy agencies offer a variety of types of help, including:

  • Budget counseling, to help with managing money.
  • Credit and debt counseling, to explain and help improve your credit score, dispute credit report errors, and analyze and prioritize debt payments.
  • Debt management plans, which arrange for you to make a single payment to the agency, which in turn pays your creditors and helps you get debts under control and paid off.
  • Other types of help. Nonprofits also may offer bankruptcy help, student loan counseling, housing counseling, and counseling on getting a mortgage or reverse mortgage.

4. Education and professionalism

Trustworthy nonprofits typically offer free public classes and workshops on financial topics. “The absence of any true education offered to the general public is a red flag,” says the NFCC.

Back away if you’re feeling pressure or hearing unrealistic promises. Avoid “counselors” who push products, come on like salespeople or offer a one-size-fits-all solution.

5. A thorough interview

An agency should take an hour or more to get the details of your financial picture, including income and debts. Be prepared to bring copies of bills and credit card and bank statements.

6. A willingness to help with all debts

You should be able to get help whether your debts are large or small. If a company requires a minimum amount of debt to help you, flee.

7. A clean record of service

Learn whether your state attorney general’s office has received complaints about the agency. Find your state AG’s contact information at the website of the National Association of Attorneys General.

Find additional consumer protection resources in your state at the USA.gov website.

Have you used a debt management plan to get a start fresh? Share your experience in a comment below or on our Facebook page.

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
How to Fix 6 Common Retirement Mistakes
How to Fix 6 Common Retirement Mistakes

Here’s how to strengthen your nest egg before or even during your golden years so these missteps don’t ruin your retirement.

70% of Older Adults Botch This Basic Retirement Question
70% of Older Adults Botch This Basic Retirement Question

Can you answer this fundamental retirement income question?

7 Things That Prove Cheaper Isn’t Always Better
7 Things That Prove Cheaper Isn’t Always Better

These items can end up costing you more if you try to go the cheap route.

How to Get Rid of 6 Hard-to-Sell Things
How to Get Rid of 6 Hard-to-Sell Things

Find out where to sell, donate or recycle items — and feel good about it.

Don’t Trash These 11 ‘Disposable’ Items — Reuse Them
Don’t Trash These 11 ‘Disposable’ Items — Reuse Them

Are you throwing away money? Consider giving these things a new purpose.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

10 States Where COVID-19 Threatens Seniors the Most
10 States Where COVID-19 Threatens Seniors the Most

No state is immune from the coronavirus. But statistics show that some places are especially dangerous for older residents.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You probably don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

5 Household Disinfectants That Can Destroy the Coronavirus
5 Household Disinfectants That Can Destroy the Coronavirus

You likely already have some of these products at home.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

22 Things You Should Always Buy at a Dollar Store
22 Things You Should Always Buy at a Dollar Store

The dollar store has great bargains on these purchases.

America’s Most Reliable Appliance Brand Is a Surprise
America’s Most Reliable Appliance Brand Is a Surprise

Have you heard of this appliance manufacturer?

12 Amazon Purchases That We Are Loving Right Now
12 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

The Top 11 Jobs That Employers Want Retirees to Do
The Top 11 Jobs That Employers Want Retirees to Do

Tired of age discrimination? Businesses are clamoring for older workers to fill certain roles.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

9 Things That Are Cheaper Due to the Coronavirus
9 Things That Are Cheaper Due to the Coronavirus

The pandemic has a silver lining.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

8 of the Worst Things to Buy at a Dollar Store
8 of the Worst Things to Buy at a Dollar Store

Not everything sold at dollar stores is a great bargain or a safe purchase. Here’s our list of products to avoid.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.