How to Avoid Bad Debt Counseling Agencies

13-Aug-2007

Facing up to a debt problem is no easy task, but there is help available in the form of debt counseling agencies. However, great care should be taken when choosing one of these services as quality advice and guidance will be needed to help you escape the debt trap. Unfortunately, unethical debt counseling agencies do exist that are more interested in your money than helping you with your debt problem. However, there are a number of steps you can take to help you avoid these. In this article we advise you on how to choose the right agency to help you with your debt problem.

One option that many consumers take is to choose a charity or government debt counseling agency. Many organisations, like the charity Consumer Credit Counseling Service, have been around for many years, they are trustworthy and they will not cost you a penny. The fact that such agencies offer their services for free can give some peace of mind that they are not interested in your money, and they exist with the sole purpose of providing genuine help.

However, organisations that offer advice for free are often charities, and they may not have the spending power or the time to devote to you that professional services have. Professional services are also often well connected with financial institutions and may have more power when it comes to negotiations. A search engine search on debt counseling agencies in Britain will show that there are hundreds, if not thousands, to choose from. In the end, the decision on which one you choose is up to you, but there are some steps you can take to help you choose a reliable service.

Start by checking with organisations you know and trust. Many companies, credit unions, universities and local agencies, like the Citizens Advice Bureau, offer free or low-cost debt counseling. If they don't, they might provide other, related services, such as budget planning, which may be enough for your needs.  Also, you should talk to your family and friends. Thousands of people seek the help advice of a debt counseling service every year, and there?s a good chance that you know one of them. Any advice you can get will help you in your final decision.

If you think you may have found an agency that suits you, be sure to ask for information about the agency. A good company will be happy to give initial advice and information without asking for an up-front fee or asking for details of your personal finances. If they ask for any of these things before showing a genuine willingness to help, you should look elsewhere.

Also, you should try to do as much research as you can on the company before you contact them. Try to find out their history; the longer they have been in existence, the better. Try to find one that?s been around for at least five years. Also, you would be amazed what a couple of internet searches will reveal. If the company has received bad press in recent years, or good press for that matter, you will most likely unearth it on the internet.

Look for an agency that offers a wide range of services. They should offer quality counseling and education, and they shouldn't immediately seek for you to enter a debt management plan (DMP), as this often isn?t necessary. Look for an agency that seems willing to offer the necessary advice to help you recover from your financial problems on your own.You can also tell a lot about an agency by the quality of their counselors ? inquire about their qualifications and experience, and try to find out how they are paid. If they are on commission for selling you certain products then it is highly unlikely that they have your best interests in mind.

You will also want to be sure that your personal information is kept safe. Ask about their privacy policy and safeguards as they will most likely be holding highly sensitive information such as credit card statements.There are a lot of perfectly good, free and low-cost debt counseling services for you to choose from. You should not have to fork out a lot of money even if you opt for a professional service. A fee of about 50 pounds should cover you for three or four consultations if you get the first one or two for free.

There are many agencies that can help you avoid or escape from bad debt problems. We hope the advice above will help you choose the right one.  If you'd like more help choosing a debt counseling agency, take a moment to fill out our short debt form, and based on your responses, one of SimplyFinance's representatives will introduce you to the right debt counselor for you.