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How should a debtor choose a credit counselor?

Tennessee residents who are unable to manage their finances may be having trouble making ends meet due to limited income and might consider engaging the services of a credit counselor. A credit counselor advises consumers about effective ways to repay existing debts to help them make a fresh financial start.

Most credit counselors are found in non-profit organizations and usually offer services over the phone or internet. These counselors are trained and certified professionals who help consumers come up with a suitable repayment plan after understanding their current financial condition. They also provide free educational material which can be used to better understand how to accomplish debt management.

Before attending a credit counseling session, a consumer should ask questions about the services provided by a particular counselor. Usually an organization that provides a range of services including budget counseling and debt management classes is the best fit. A debtor might want to avoid an organization that provides only a debt management plan instead of analyzing your financial situation and applying the best fix.

Most credit counseling organizations advertise that services are free but often there may be hidden fees. A thorough questioning about the charges should be made before counseling sessions start. Also, a written agreement which incorporates every promise made orally is advisable. Also a debtor should verify the counselor's credentials and ensure that he or she is licensed to offer financial services in the debtor's state of residence before engaging their services.

If they claim to be certified professionals, a debtor should independently verify the credentials with an organization trained by a non-affiliated party. A market survey may be indicated to judge the reliability of a credit counselor. Visit the local consumer protection agency to check if any complaint has been filed against the potential credit counselor. A good reference is the U.S. Bankruptcy Trustee program which keeps a list of credit counselors certified to provide pre-bankruptcy counseling.

Source: Consumer.FTC.gov, "Choosing a Credit Counselor," accessed on Aug. 6, 2015

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

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