The For-Profit vs. Non-Profit Consumer Credit Counseling Battle Continues
Pennsylvania’s State Legislature is poised to pass a bill that would allow for-profit companies to offer credit counseling services in the state. Those opposed to the bill claim that it will lead to consumers being advised to enter into debt management programs when its not appropriate.
Patricia Hasson, president of the Consumer Credit Counseling Service of the Delaware Valley, claims that consumers are best served by non-profit firms according to a Philadelphia Daily News article. She explains that “disinterested” parties, such as non-profits, are more likely to explore other options for a consumer prior to entering into a debt management program.
Supporters of the bill claim that the legislation will bring more credit counseling and debt consolidation choices to consumers as well as licensing and consumer protections to the industry.
Regardless of whether a consumer credit counseling agency is for-profit or non-profit, it’s important that you understand what to look for when evaluating which firm to work with.
Counseling
Your first goal should be to find someone willing to evaluate all of your options with you and help you choose the best path for your situation. Many consumers find themselves in debt management or debt consolidation programs when they would have benefited from help with budgeting or in some cases bankruptcy. If you feel that you are being pressured into a debt management program prior to exploring all of your other options, you should seek assistance from another firm.
Everything In Writing
The company you choose to work with should offer written contracts and be upfront and clear with regards to the various services they offer, how they are compensated, the fees you can expect to pay, as well as how long it will take to meet your financial goal.
How Are They Compensated?
Some credit counselors are compensated by commissions and bonuses for enrolling consumers into debt management programs. If you feel this is a conflict of interest and may make it difficult to trust and work with the counselor, you may want to seek out a firm that doesn’t compensate their employees in this manner.
Reputation
Check the firm’s history with the Better Business Bureau and do an online search of the company to see if there have been many problems or issues experienced by other consumers. The U.S. Department of Justice maintains a list of approved credit counseling agencies for those consumers fulfilling the bankruptcy counseling requirement which can be helpful when starting your search. A referral from a friend or family member that had a good experience with a credit counseling agency can also be a great starting point.
Ultimately, the quality of the guidance and information provided by the counselor you choose to work with is more important than their company’s tax status. Your goal should be to find a company or individual willing and able to evaluate your situation, walk you through all of your available options, and help guide you in making the best choice for you and your family.
Sources:
Philadelphia Daily News
Department of Justice
About the Author:
Chris Rocks is the Founder and Executive Director of the Credit Advisory Alliance
Post written by Chris Rocks
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno.
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October 15th, 2008 at 5:50 am
As we all know Consumer Credit Counseling Service is the nation’s oldest and largest credit counseling organization. The question that keeps coming in our mind is that Is Consumer Credit Counseling Service a non-profit organization? They are recognized by both the federal and state government as a non-profit agency (501C(3)). Most of the funding to CCCS comes from voluntary contributions from creditors participating in our Debt Management Program (DMP).