Credit Counselors and Getting Professional Help

Taking debt management matters into your own hands is commendable. After all, if you have tried something and failed, you are still vastly better off than if you tried nothing and succeeded.

Still, taking the solo route may not be viable for many people. Lack of time, lack of education, or simply lack of interest may spur some folks on to going out and getting professional help.

But is a professional debt counselor or credit repair specialist right for you?

Of course, there are pros and cons to getting good debt counseling help, too. Yes, having a reputable, smart professional that understands debt on your side can be a big plus in your debt management campaign.

On the other hand, there are plenty of fly-by-night, fraudulent debt counselors out there, lurking on the fringes of the financial services industry. Many of them thrive on the Internet, preying on desperate and vulnerable individuals who don't realize that they're placing themselves in deeper financial peril by doing business with debt management con artists.

And even the ethical credit counseling companies will only go so far with you. There's an old story about the tax attorney who told his client on the way to the IRS office "I did say that as your tax attorney I would accompany you to the IRS in the event of an audit. But I never said that I'd go inside."

Similarly, if you ever go to court, you probably won't have your trusty credit service advisor alongside of you. Everyone has limits.

Chances are, the debt management help you'll be seeking will come from a credit counseling or credit repair service. These are agencies designed especially to help people get out of their debt problems and get on with their lives.

Usually that help comes within the framework of debt management advice or direct intervention on your behalf to your creditors. The idea is to help people manage their debts responsibly and eliminate any debt in the most economically feasible way possible, to you, that is. Credit counselors stand by your side and give you an educated voice. They can play the equalizer role you'll need, given the fact that the creditor will be well armed against you.

You have to be cautious about the type of credit management service you choose. While many are virtuous and ethical, some are not. They over-charge and under-deliver. They offer bad advice. Check with your local consumer protection agency before you hire a credit manager.

Tips on Choosing a Credit Counselor

How can you tell if a credit counseling service is reputable? Follow these guidelines:

• Look for credit counselors who don't charge for free information, like information on legal rights accorded debt sufferers or data on government-sponsored credit programs.
• Make sure you receive a list of what the credit service will do for you before paying them any money. Then only pay if they do what they promised.
• Check with your local consumer protection agency.

Once you begin working with a credit manager, gather up all of your relevant debt documents, invoices, account statements, and such, make copies and bring them to your first meeting with your counselor. On the agenda will be scenarios where you begin some sort of repayment plan. So be prepared to figure out how much you can afford to pay.

Also note any aggressive collection agencies and ask your credit counselor to help stop them from contacting you. With a credit service on your side, they can begin fielding such calls - not you.

That's what you're paying them for in the first place.

All things being equal, if you create a good, solid debt management framework, one that includes knowing your credit score, knowing what's on your credit report, and knowing how to deal with creditors, lenders, and collection agencies, you really don't need professional help.

The key is finding your comfort level. If you can't sleep at night worrying about your student loan debt, and have exhausted all other options, maybe having a professional on your side is right for you. But short of that, try to handle debt issues on your own before paying someone else to do it.

Nobody is as interested - or has as much at stake - in your financial affairs as you do.

In that regard, you are your own best debt management advocate.

Taking Your Personal Financial Inventory