NDSU Extension Service - Ramsey County


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The Trouble with Debt Counseling

The Trouble with Debt Counseling

          “Desperate times calls for desperate measures” is a quote that may apply to some situations but being in debt should not be one of those desperate times.  While there is a growing need for better debt counseling to help consumers get out of trouble, one problem is that there is no federal regulation of debt counseling services.

          As the economy worsened, literally thousands of debt counseling or consolidation services popped up.  Finding a reliable debt counseling service can be difficult.  Following are some suggestions to find the right service for your situation.  Here are some suggestions:

  • Avoid any agency that solicits you by phone or sends you spam emails.
  • Look for an agency that is a member of the National Foundation of Credit Counseling (NFCC), a 50-year-old organization with strict accreditation guidelines.
  • Visit www.debtadvice.org to find an NFCC affiliate in your area.
  • Don't be misled by agencies that say they are "non-profit” when they are charging a fee. 
  • Don't give your credit card or bank account numbers to any agency over the telephone.
  • Ask how your first month’s payment is used.  Reputable agencies do not keep the first month's payment, demand a contribution or charge high fees.
  • Don't believe anyone who claims they can "wipe out" your debt.   A reliable debt counseling/consolidation service will help you re-pay your debt in a manner that alleviates any severe stress on you and leaves you with dollars to live on but they cannot wish your debt away.


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