How Do Bankruptcy Laws Effect Credit Counseling

Before you sign up for credit counseling services

, you need to make sure that you are not being taken by a scam artist or a less-than-ethical company. You have probably seen many advertisements promising to get you out of debt, but stop and think for a moment. Where do you think those companies are getting the millions of dollars necessary to advertise their services? The only place they could be getting that money is from other struggling consumers just like you.

While these companies will be able to help you with your debt, you will pay dearly for it. However, there are credit counseling agencies that are truly there to help. Yes, they will charge you for their services, but the charges will be fair and will be used to help them continue to offer their services to those struggling with debt.

First, avoid any companies that will charge you a huge fee when you being your relationship. While there is often a small start-up fee, you should not be paying hundreds for credit counseling services. The only way this can be justified if it is used to pay for one on one counseling services that are more in depth than the average credit counseling agency.

You will also want to avoid credit counseling agencies that are not accredited. Accreditation lends credibility to the company. If the companies you are considering have not pursued accreditation, there is likely something they are trying to hide.

Next, find out how much the credit counseling agency will be sending to your creditors, and make sure you know when it will be sent. Some of the less ethical companies will pocket your first payment. If you are not aware of this, you will face missed payment penalties. Remember, the credit counseling agency will keep a portion of the payment as its fee, but you should know before you agree to use the services how much this will be.

by: Cary Bergeron

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