Credit Counseling (You’ve Been Warned Not To Go To This Type of Credit Counseling Agency) 

Credit counseling has become an increasingly popular alternative to bankruptcy and for good reasons. Soon after the federal guidelines for filing bankruptcy tightened, aggressive collection agencies began to literally hound debtors. Seeking a viable solution other than bankruptcy, many opted for credit counseling. But the warning is "BUYER BEWARE!" All credit counseling companies are not created equal. Find out what the differences are and which companies you must avoid at all costs.

There Are Two Types Credit Counseling Agencies: Non-Profit and For-Profit
There are two types of credit counseling agencies: the non-profit and the for-profit. The for-profit agencies work strictly for commissions. That means they are highly motivated to push you to sign up for their services. In their lingo, the commissions are called, classified or tagged as management fees and processing fees. These fees are usually based on the amount of your monthly payment. The typical fee structure includes a start-up fee or activation fee plus a monthly fee.

When It Comes To Credit Counseling Agenies, Watch The Fees!
According to the industry experts, the fees or commissions charged should not be more than 20% of your monthly payment. This is known as the Fair Share. However, the Fair Share IS NOT law and companies are not bound to abide by it. That’s why it’s vitally important that you shop around and perform your due diligence prior to signing an agreement with any company. The Internet has really leveled the playing field because you can easily research a company’s history, background and standing with a few clicks.

For-Profit Credit Counseling Agencies Get Paid Off The Top
It is important to note that many of the for-profit credit counseling agencies take their commission off of the top. Meaning, after they negotiate payment arrangements with your creditors and you start making payments, those first number of payments go to paying that agency’s commissions. That money DOES NOT go to your creditors; not even a portion of it! This means that while the agency is collecting the balance of their commission, your creditors are still itching for payments. That’s why you here so many horror stories from debtors who made payments to credit counseling agencies that was never posted to their accounts or reported.

Some companies have contracts that state they don’t post any payments to your accounts unit their commissions slash fees are paid in full. It should go without saying, but I’ll say it anyway; you MUST avoid these companies at all costs.

When It Comes To CreditCounseling Agencies - "Trust But Verify!"
Heed this warning: in today’s debt strapped economy, there are numerous companies that put on a façade of being non-profit when they are actually not. They use little deceptive tricks such as having similar names as the non-profits and similar looking websites. Even if the credit-counseling agency claims to be non-profit, in the word of Ronald Reagan, “Trust but verify!”

Joel Marks has been helping people get out of debt and avoid both bankruptcy and foreclosure for over fifteen years. Utilizing savvy debt counseling, debt management programs, Federal laws and a team of attorneys, debt counselors and advisors, he has quietly assisted thousands come from under the heavy burden debt.

 Source: http://debterasure.com/