Consumers should choose a nonprofit debt management service that provides free information about its services and fees without requiring personal and financial information, reports the Federal Trade Commission. They should check for customer complaints about the organization with local consumer protection agencies and the state attorney general. The service should be accredited and employ certified counselors, adds Nolo.Continue Reading
Although debt management services may have nonprofit status, they may still charge high fees, cautions the Federal Trade Commission. The organization should fully disclose its fees and other sources of revenue before consumers decide to participate, according to Nolo. Reputable credit counselors not only set up debt management plans but also have free workshops and educational materials on managing finances, creating a budget and handling credit.
Consumers should only select debt management services that are registered nonprofits certified by the International Organization for Standardization or the Council on Accreditation, advises Nolo. Individual counselors should have certification by the Center for Financial Certifications, the National Foundation for Credit Counseling, the National Association of Certified Credit Counselors or other qualified organizations. Although credit counselors often recommend debt management plans, they should also offer other options. If a debt management plan is the best option, a counselor should provide guidelines in writing stipulating the estimated length of the plan and send periodic statements detailing payments, disbursements and balance.Learn more about Credit & Lending