Credit Counseling for Debt

Counseling services are available to help people budget money and pay bills. Credit unions, cooperative extension offices, military family service centers and religious organizations are among those that may offer free or low-cost credit counseling.

Local, nonprofit agencies that provide educational programs on money management and help in developing debt payment plans operate under the name Consumer Credit Counseling Service (CCCS). They are members of the National Foundation for Credit Counseling (NFCC). Call 1-800-388-2227 or visit

Debt Management Assistance

Several national nonprofit organizations also provide information and assist people with debt problems via the phone and Internet.

  • American Consumer Credit Counseling. Visit or call 1-800-769-3571
  • InCharge Institute of America. Visit or call 1-800-565-8953.
  • Money Management International. Visit or call 1-866-899-9347.
  • Myvesta. Visit or call 1-800-680-DEBT.

Typically, a counseling service will negotiate lower payments with your creditors, then make the payments using money you send to them each month. The cost of setting up this debt-management plan is paid by the creditor not you. Ask these questions to find the best counselor for you:

  • What services do you offer? Look for an organization that offers budget counseling and money management classes as well as a debt-management plan.
  • Do you offer free information? Avoid organizations that charge for information or make you provide a lot of details about your problem first.
  • What are your fees? Are there set-up and/or monthly fees? A typical set-up fee is $10. If you’re paying a lot more, you could be the one getting set up.
  • How will the debt management plan work? What debts can be included in the plan and will you get regular reports on your accounts?
  • Ask if the counselor can get creditors to lower or eliminate interest and fees. If the answer is yes, contact your creditors to verify this.
  • Ask what happens if you can’t afford to pay. If an organization won’t help you because you can’t afford to pay, go somewhere else for help.
  • Will your counselor help you avoid future problems? Getting a plan for avoiding future debt is as important as solving the immediate debt problem.
  • Ask for a contract. All verbal promises should be in writing before you pay any money.
  • Are your counselors accredited or certified? Legitimate credit counseling firms are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

Unfortunately, honest credit counselors have a lot of rivals who are more interested in taking your money than helping you. They can do more harm than good. Red flags are:

  • Big upfront fees. A reputable credit counseling agency will send free information about itself and the services it provides without requiring you to provide any details about your situation.
  • Unrealistic promises. Some companies falsely claim they can solve problems for pennies on the dollar or remove negative information from your credit record.

Check with your local consumer protection agency and the Better Business Bureau ( to see if any complaints have been filed about the company.

Alert: “Debt Relief” Could Be Code for Bankruptcy

The Federal Trade Commission cautions consumers to read between the lines when faced with ads in newspapers or telephone directories that promise debt relief. This relief may actually be bankruptcy. These catch phrases are commonly used:

  • “Consolidate your bills into one monthly payment without borrowing.”
  • “Keep your property.”
  • “Stop credit harassment, foreclosures, repossessions and garnishments.”
  • “Wipe out your debts! Consolidate your bills!”
  • “Use the protection and assistance provided by federal law. For once let the law work for you.”
Source: Federal Citizen Information Center