10 tips: Choose a credit counselor carefully - St. Petersburg Times

Are you reeling from the weight of credit-card bills, pupil loans or other debt? If your debt payments -not including your mortgage and auto payment - have got spiraled to 25 to 50 percentage of your take-home pay, you might necessitate some aid to acquire the job under control. A credit-counseling federal federal agency may be able to help you immensely, so long as you're extremely careful about choosing the right agency:

1 Understand why your pick matters. A reputable recognition counsellor can assist you refund your creditors at decreased involvement rates, put up a personal budget and avoid bankruptcy. An unscrupulous federal agency can saddle you with bad advice and go forth you with even more than fiscal woes.

2 Avoid credit-repair clinics. Their television advertisements promise: "We can wipe out your bad credit, 100 percentage guaranteed!" But such as clinics, which are different from credit-counseling agencies, often complaint 100s or even one thousands to make what you can make yourself for free.

3 Point yourself in a better direction. You can check up on counselors' certificate and be connected to federal agencies that have got made a committedness to certain professional and ethical criteria through the National Foundation for Recognition Guidance , toll-free 1-800-388-2227 and the Association of Mugwump Consumer Recognition Guidance Agencies ( , toll-free 1-866-703-8787 ).

4 Clarify what your guidance will include. A good counsellor will sit down down with you and discourse your fiscal state of affairs in detail, invent a tailor-made action program and supply you with in progress support. A deficient counsellor will inquire you to fill up out an application.

5 Inquire about the counselors' training. Your counsellor should have got a college degree, as well as courses of study in lending, credit, budgeting, saving, investing and bankruptcy.

6 Know what to expect. Before guidance begins, a good counsellor will desire to see your wage stubs, credit-card and loan statements and a filled-out form detailing your budget.

7 Ask how the federal agency and its staff acquire paid. The federal agency should uncover that it have much of its income through parts from creditors known as "fair share." In other words, creditors give the federal agencies a cut of the money they recover from you. If the agency's staff acquires paid based on the services they sell you, see going elsewhere. Ditto Mark for federal agencies that do you to pay an up-front fee.

8 Brand certain a debt-management program is the best route. Be wary of federal agencies that pushing you into such as a program before reviewing your fiscal situation.

9 Stay on high qui vive for expensive mistakes. A counsellor may state you to halt paying your measures and direct your debt payment directly to the agency. That tin be mulct - unless your creditors don't hold to the debt-management plan, or your federal agency neglects to pay your measures on time.

10 Know what you're getting into. A debt-payback program can take as long as two to five old age to complete. If you lose any payments to the federal federal agency during that clip - even if you're years into the procedure - the agency may necessitate full debt payment.

Laura T. Coffey ()

Sources: Consumer Reports ( ); Financial Planning Association ( ); Federal Soldier Trade Committee ( )

[Last modified August 24, 2007, 20:05:39]