If you’re in a situation where you’re about to be forced into bankruptcy, or you’re already missing payments that affect your credit, a debt management solution is perhaps the only option. Those in this sort of situation should consider a non-profit debt management solution.
Organizations are out there that exist purely to help those who have gotten into rough financial situations. Many of those organizations are for-profit, and they’ll charge a hefty fee for their services. This essentially defeats the purpose of seeking help for financial problems. Non-profit debt management agencies don’t have those same high costs, so they are a better option.
There are tons of debt management solutions out there, but not all of them are non-profit. Even amongst the non-profit options, there is a spectrum of quality. You need to know what to look for when selecting a company. Every non-profit debt management company will provide free credit counseling due to legal obligations that go along with being classified as a non-profit. To find the best non-profit debt management company for your situation, consider the following tips.
Check Accreditation –
Companies that don’t have the proper accreditation might be scams trying to take your money. Make sure any non-profit debt management solution that you consider is accredited by both The Council on Accreditation and The National Foundation for Credit Counseling at the very least. It’s also wise to check out their BBB rating and read some past client reviews.
Request Free Counseling –
All non-profit debt management companies are required by law to offer free credit counseling, so if you make a request for such a service and it is denied, be wary of that company. In one of these counseling sessions, you should expect the counselor to browse through your debt, liabilities, assets, and income in order to create a fully comprehensive snapshot of your current financial situation. The counselor will provide general information and advice. If you are given a free session, but the counselor spends the entire time trying to push you into a plan, you should probably avoid that company.
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Look For Fees –
Non-profit debt management companies still charge for their services, but there is a wide chasm between the cost of a non-profit debt management firm and a for-profit company. Non-profits will never demand upfront fees or ask for ‘voluntary contributions’ in order to start a credit counseling session. You’ll need to decide if the fees associated with a firm are reasonable. Check for maintenance fees, minimum monthly payments, and penalties. The best agencies will have low monthly fees and no large upfront cost. Some non-profit agencies will even waive your fees if you meet a certain threshold of income or debt. These agencies are there to give you the help you need, and they won’t prey on you in your time of need.
Check References –
Go online and try to find reviews or references from those who have used the company in the past. Local companies in particular need to be scrutinized in this way since you might not find much public information about them. You can ask the company directly for references, but they will be unable to provide actual names due to confidentiality agreements. If you do ask for references and you are given specific names, those customers must have given permission to the company to do so. Other places to look include Yelp, Google+, Facebook, and Angie’s List. Most people who have negative experiences with a debt management company will be quite vocal about it given the proper platform.
Request Contract Template –
Once you’ve decided on a debt management company, you’ll probably receive a client agreement or contract of some sort. This document will finalize the deal and provide details. If you are planning to sign the agreement, make sure to ask for a copy beforehand so you can study it thoroughly. Even if the company made verbal assurances, those would be for naught if they aren’t included in the actual contract. If you find something you don’t like, it’s better to find it before you’ve signed than after. Some companies will try to convince you that they can help manage your debt without any sort of contract. These are typically scams and should be avoided. Reputable companies will always make you sign a customer agreement of some sort.
Remember that accreditation is one of the most important aspects of finding a debt management solution. Make sure the company you are considering has a current license from one of the aforementioned accreditation agencies. Also, be wary of the term ‘non-profit’ as it’s used to describe these debt management businesses. It doesn’t take much for them to legally use that label, and it is surprisingly easy for them to get around the label with practices that are clearly meant to maximize profit.
Other Helpful Tips –
First, always make sure that the non-profit debt management solution you pick has been accredited by the National Foundation for Credit Counseling (NFCC). These groups oversee the issuance of accreditations for many for-profit and non-profit organizations that offer professional debt management solution services. Note: be sure that each service you check out has a current license from one of these groups. Some services (including non-profit organizations) get an initial certification, only to let it lapse or fail to qualify for re-certification. Only choose a debt management solution that is provided by a group with an up-to-date accreditation!
Next, remember that the label “non-profit” is easy to use in the debt management solution field, but the title alone is not proof that an organization really is what it purports to be. When you contact a debt management solution service that claims to be non-profit, ask to speak with the owner or top manager. Ask that person point-blank if their service is truly a ‘charitable organization.’ They are required by law to explain whether they are truly charitable or simply licensed as ‘non-profit’ for tax purposes while still charging clients fees for their services.
Finally, don’t be confused by the terms ‘debt management solution’ and ‘credit counseling,’ which are different practices. Debt management involves a third party (the non-profit organization in this example) working with your creditors to come up with lower payments and/or a reduction in the total amounts you owe each. A credit counseling service stops short of any dialogue between the company and your creditors. It is meant simply to give you advice on how to better handle your own finances and work within a budget from month to month.
By utilizing a debt management solution, you are taking action to correct your current situation. Make sure you research all of the non-profit debt management solutions available to you so that you can find the best one that works for you. Also, keep the above tips in mind and research each company thoroughly.
We hope you’ve found the information in this blog post enlightening. Feel free to give us a call at 1-866-699-2227 or visit us online at www.advantageccs.org to find out more about non-profit Advantage CCS and see our accreditation list, partnerships, past client feedback, success stories, and much more!