In times such as this, where millions of homes are about to be foreclosed or increasing number of people are filing for bankruptcy, regardless of their monthly income; it is not at all a taboo to get yourself enrolled in a credit counseling program. However, you need to verify the competency of the credit counselors who’ll take you through those sessions.

If you are not aware of the things you should look for in a good credit counselor, then you’ll thank your stars for having gone through the remaining article.

Credit Counseling

Things to watch out for in a credit counselor

Following tips will help you to find out a good credit counselor in order to receive the best possible guidance with respect to your financial obligations:

  • Legitimacy of the agency – As per the law, it is mandatory to complete a course on credit counseling from an approved non-profit credit counseling agency before filing for bankruptcy. So, if you are contemplating to file either chapter 7 or chapter 13 bankruptcy, then you must ensure that the agency you are enrolled with has the requisite permission to issue a certificate of completion after completing the instructional course in budgeting and personal finance. For that reason, you can visit the website of the Executive Office for United States Trustees that has put up a list of all the agencies permitted to offer credit counseling services.
  • Services offered by an agency – Generally, there are two types of terms that may confuse you initially. They are – credit counseling and debt counseling. However, there is a vast difference amongst the two. Credit counseling refers to the classes held by a counselor where he imparts some basic knowledge about budgeting as well as personal financial management, whereas debt counseling refers to the reduction of your debt by the debt counselors after negotiating on your behalf with the creditors.
  • Qualification of the counselors – In order to locate a genuine a credit counselor, you need to look at the certifications of the professionals serving in a credit counseling agency. These certifications should’ve been obtained from an independent pro-consumer organization outside the influence or purview of the agency a particular credit counselor may be working for. Apart from that, delve deeper into the educational background of the counselors and their professional achievements. You must verify whether or not a credit counselor is a certified financial planner, certified public accountant, attorney or a recognized financial expert.
  • Non-profit status of the agency – You mustn’t be duped of a credit counseling agency’s non-profit status. This might have been obtained on the sly. In order to find out the legitimacy of a non-profit credit counseling agency, you must look for the official approval that is conferred as per the provision mentioned in Section 501(c)(3) of the Internal Revenue Code (IRC). You may visit the website of Internal Revenue Service (IRS) and check out the section marked as charities.

Finally, keep reviewing the website of the IRS since the federal body has been continuously scrutinizing the business practices of those agency on whom it had conferred upon the non-profit status and revokes the status in case there is gross misconduct proved against any such agency.