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When Credit Counselors Can Be Harmful Lawyers
Should I Go with a Credit Counselor when I Am Looking for a Way to Get Out of Debt?
Some credit counselors can be quite helpful for consumers looking for a way to pay off all of their debt. However, there are other credit counselors who are not the charitable organization that they seem, and may even leave their customers in a worse position than they were in before they came for help.
The first thing to be aware of is that there are many ways to help decrease and pay off debt that involve only you. Whether it is something as simple as cutting up your credit cards or taking out a low interest loan to pay off your high interest debt, these are all options that you can do on your own.
However, if you feel that you are in over your head and need the help of a credit counselor, be sure to look out for the red flags when looking around.
What Should I Look Out for when I Am Researching a Potential Credit Counselor?
If you should see the following elements in a potential credit counselor, you may want to keep looking or find another way to strategize payment of debt:
- Television or radio ads - this is not to say that all credit counselors that advertise on these mediums are low quality, but the point is that you should not base you decision on an ad you have just seen on television. Instead, after you see the ad, do some research into the company, including if they are currently being sued by any of their previous customers.
- Fees - look at how much the fees are and what kind of fees they are. If the setup fee and the monthly fees are more than you think you can handle, keep looking. Also, some debt counselors will offer what they call "voluntary" fees, meaning you supposedly do not have to pay them. However, some counselors will be very aggressive in trying to get you to pay those fees, so be sure to ascertain ahead of time what fees you definitely have to pay and what fees are purely voluntary.
- Sales tactics - it you are talking to a salesperson, either on the phone or in person, keep in mind that ideally they should be discussing whether a debt management plan is appropriate for you and if so, what kind is appropriate. If the salesperson automatically assumes whatever plan they have laid out in front of them is right for you, you should consider going elsewhere. Plus, make sure the salesperson spends adequate time developing a plan; this should take around half an hour to over an hour.
What Should I Do if I Feel I Have Been Cheated of My Money Because of False Advertising by the Credit Counselor?
You may want to contact an attorney who has experience in consumer credit. Your attorney will be able to advise you of your rights and let you know what your credit counselor should have disclosed to you from the beginning. Your attorney will also be able to let you know if you may be entitled to compensation in a lawsuit against the credit counselor.
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