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Should I go to a credit counselor, or to a debt consolidation service?

 

It all depends on your exact circumstances. Many people can be helped by credit counseling, but be careful who you go to. The only credit counselors that I recommend are Consumer Credit Counsel Service; a nationwide network of nonprofit centers. They have several locations in Memphis, and one in West Memphis, Arkansas. Your church or neighborhood group may also have a good credit counseling program.

In my opinion, most people will not be helped by a debt consolidation service. In fact, there are many people who have paid for debt consolidation services, only to end up owing a lot more money than they did when they started. You have probably seen a lot of commercials advertising "nonprofit" services, promising to negotiate your debts with all of your creditors and to solve all of your problems. Many of those "nonprofit" services were created by credit card companies and finance companies, and most of their counselors are not properly trained. None of them can offer the absolute results that federal bankruptcy law does. On top of that, there are certain creditors who absolutely refuse to work with consolidation services. They don’t have that option in bankruptcy, where creditors have to follow the same rules as everyone else.