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Credit Counseling Agency Checklist
If you want to work with a credit counseling agency, interview several. Here are some questions to ask. Check with your
state Attorney General, local consumer protection agency and the Better Business Bureau to find out if consumers have
filed complaints about the provider you are considering. Any reputable credit counseling agency should send you free
information about itself and the services it provides without requiring you to provide any details about your situation.
If not, consider that a red flag and go elsewhere for help.
Before placing your trust in a consumer credit counseling agency you should ask these questions:
- Is this agency a non-profit organization? Will my funds be protected?
Since some agencies charge little or nothing for managing the plan and others charge a significant fee over time,
you need to know up front what the cost will be. During the initial interview find out their fee, sources of funding,
who regulates and audits their operation, what are the counselors qualification, and is there a formal written agreement.
- Is there a mandatory up-front fee? How much is it?
Some agencies charge mandatory up-front fees - $250 or more.
That's a lot of money for someone who is having trouble paying their current bills.
- Are agency services confidential?
Your personal and account information is extremely confidential and should be carefully protected against unauthorized
access. Your information should always be kept confidential between you, the agency, and your creditors.
- Will they devise a plan tailored to fit your needs?
Ideally, an agency should offer a hardship program, rather than telling you your only option is bankruptcy.
- Are budget and credit education opportunities offered?
Educational programs are important to help you solve your financial problems and learn positive new habits.
You can tell a lot about an agency by the quality of its educational materials and services.
- What kind of training do you have that makes you qualified to assist me?
Although it's hard to judge credentials, some counselors are really nothing more than telemarketers
who are paid to sign up as many people as possible for repayment programs.
- Can I get up-to-date, regular reports on the status of my accounts?
You need to be able to tell if the counseling agency is, in fact, paying all your creditors on time.
Find out how you will be able to monitor your account.
- Is there a minimum amount of debt I have to have in order to work with you?
Some agencies will turn you away if you don't have "enough" debt. But what may not seem like a lot to someone at an
agency may be unmanageable for you! You want an agency that will work with you no matter what your situation.
- How often do you pay creditors?
This is a critical question. The faster the agency pays creditors, the faster your payment will be credited.
Slow payments by the agency can mean late fees or higher interest for you.
Service and Fee questions to ask:
- What services do you offer?
- Do you have educational materials? If so, will you send them to me? Are they free? Can I access them on the Internet?
- In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future?
- What are your fees? Do I have to pay anything before you can help me? Are there monthly fees? What's the basis for the fees?
- What is the source of your funding?
- Will I have a formal written agreement or contract with you?
- How soon can you take my case?
- Who regulates, oversees and/or licenses your agency? Is your agency audited?
- Will I work with one counselor or several?
- What are the qualifications of your counselors? Are they accredited or certified? If not, how are they trained?
- What assurance do I have that information about me (including my address and phone number) will be kept confidential?
Repayment Plan questions to ask:
- How much do I have to owe to use your services?
- How do you determine the amount of my payment? What happens if this is more than I can afford?
- How does your debt repayment plan work? How will I know my creditors have received payments? Is client money put in a separate account from operating funds?
- How often can I get status reports on my accounts? Can I get access to my accounts online or by phone?
- Can you get my creditors to lower or eliminate interest and finance charges or waive late fees?
- Is a debt repayment plan my only option?
- What if I can't maintain the agreed-upon plan?
- What debts will be excluded from the debt repayment plan?
- Will you help me plan for payment of these debts?
- Who will help me if I have problems with my accounts or creditors?
- How secure is the information I provide to you?
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