Myths from Credit Counseling Agencies

Let Us Give You the Facts

The idea of credit counseling is a good one. Unfortunately, the practices that are conducted by many credit counseling agencies have strayed far beyond what was originally intended of them. Even more unfortunate is the fact that many debtors trustingly turn to credit counseling agencies before seeking the professional advice of an attorney. The decision to opt for an agency over an attorney has resulted in disastrous effects for a number of our past clients - many of whom desperately sought Adams Law Group as a last resort to end the fiasco that was created by the credit counseling agency that was supposed to be taking care of them.

As with anything else, there are good credit counseling agencies and there are bad ones. Since it can be difficult to determine which of these agencies are good and which are bad, we have prepared a list of myths and mis-practices that have been reported to us by the victims of these agencies. We suggest that you read through these thoroughly before choosing to work with a credit counseling agency in order to settle your debt. What you might think is helping you could be no more than a false sense of security that was created by an agency's self-created myths of encouragement.

The Myths that Could be Hurting You

One of the strongest indications that a credit counseling agency is not truly invested in helping you settle your debt is the amount of money that the credit counselors ask from you upfront. Many of the agencies that we have identified as unethical in their conduct have required large initial payments from their clients, promising that their money will be safely held while a settlement is negotiated. The money that is provided to these creditors, however, is hardly ever kept safely as promised.

Don't be deceived by a credit counseling agency that advertises itself as a not-for-profit organization. In reality, this does not mean that there will be no charge for the services provided to you. Declaring a not-for-profit status is no more than a tax ploy - it has nothing to do with the amount you will owe an agency that handles your case. In fact, the fees you pay to these agencies in only one month often equate to more than it would cost you to complete the entire process of filing for bankruptcy through an attorney.

People who consider a credit counseling agency must also understand the monthly fees that might be asked of them. A credit counselor that does not ask for exorbitant upfront fees is not necessarily a safe option. These creditors may instead ask for several monthly payments that will be used to "pool your money and negotiate a settlement;" or so they say. In reality, the first two to three payments you make to the company are used solely to cover the counselor's administrative fees. More often than not, you will be sued for your debt long before a large enough sum of money is collected by the agency to "negotiate a settlement," on your behalf.