CREDIT DEBT REDUCTION

7 debt-counseling warning signs - Work & Wealth

Shop around to find credit counseling that works for you. The "Credit Counseling in Crisis" report cites seven reasons to reject a counseling agency:

1 High fees If the setup fee for a debt-management plan (DMP) is more than $50 and the monthly maintenance fee is higher than $25, look for a better deal.

2 So-called voluntary fees Some agencies claim that their fee is voluntary but will pressure you to pay their full asking fee. Never pay more than you can afford.

3 The hard sell If the agency aggressively pushes debt "savings" or the possibility of a future debt-consolidation loan, beware.

4 Commission based counseling Avoid counselors who get commissions for putting you in a DMP.

5 The 20-minute test An agency that suggests a DMP in less than 20 minutes hasn't spent enough time examining your finances. Effective counseling sessions, by phone or in person, generally take 30 to 90 minutes.

6 One size fits all Some agencies only offer DMPs. If educational options such as classes or budget counseling are not proposed, keep looking.

7 Aggressive ads Don't fall for slick TV and Internet advertising, or telemarketers; many agencies charge unreasonable fees or offer no counseling. Shop around and call the Better Business Bureau to check for complaints.

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