Watch Out For Bad Apples Who Offer Consumer Debt Counseling

Some people may wonder about the point of having a non-profit organization
such as those that provide credit counsling. After all, everyone wants
something, it is hard to believe that organization exist in order just to
help people.

If you are skeptical about the altruistic motives behind a company that is
set up to help consumers with credit card debt settlement through methods
such as consumer debt counseling, it might be useful to be informed of the
benefits offered these companies for holding the non-profit title.

First of all, having the non-profit lable exempts these companies from
federal taxes, even though they exist in order to help people settle credit
card debt. In addition, they are usually exempt from several state taxes,
which means that they save thousands of dollars every year just by being
non-profit.
The label also means that many of these companies are eligible to receive
governmental grants and private grants as well each year.

Creditors will also tend to look upon non-profit organizations positively as
this status is mandatory in order to initiate Fair Share contributions.
Finally, non-profit status will also allow companies to avoid consumer
protection laws in some states, which increases their ability to make
profits. It should come as no surprise that major credit counseling
companies proudly display their status as non-profits for all to see. Many
of these companies, however, use this label as a way to trick potential
customers in and accomplish their real goal, which of course is maximizing
their profits.

Although this is true of several credit agencies, it is not the case for all
and there is legitimate help out there for consumers who are seeking to
reduce their debt through these services. One of the first things to look
for when determining whether such a company is legit is to find out if it is
accredited through the National Foundation for Credit Counseling or the
Association of Independent Consumer Credit Counseling Agencies. The Better
Business Bureau is of course another way to determine the kind of services
the company offers, and if they have done so in a consistently honest way.

Good credit counseling agencies are a necessity for debtors, and individuals
must keep this in mind. The agencies help debtors to create debt management
plans and to get their financial house in order before disaster strikes.
They also carry clout with creditors and can therefore help to lower
payments and interest rates, as well as eliminating late fees and finance
charges. Many companies will also help debtors by calling off collection
agencies and other organizations that try to get the money out of the
debtor. Remember when you are looking for a company that can help with debt
management that you have to be very careful in what you settle for.

About The Author: Focusing on the area of consumer counceling, Eric
Slarkowski pens primarily for http://www.creditenio.com .
You can find his writings over at
http://www.creditenio.com/ccsettlement.html and various other sources for
credit card debt settlement tips.