How to Select a Non Profit Debt Counseling Service

A non profit debt counseling service should be governed by section 501c(3) of the Internal Revenue Code. This ensures that they are a bona fide operator and aren't purely there to make a profit. A non profit provider should seek to try to make finances balance without the need for a credit card debt solution. Only when this isn't a possibility should a Debt Management Program or a debt settlement program be discussed.

How Do They Make Money?

Whilst they need a reliable income stream to survive, the majority of funding comes from a 'fair share' payment from the credit card debt solutions offered to customers. Although each creditors 'fair share' payment is different, the industry average is currently about 5 to 6%. No fee will be charged to the client for the review itself. Some services also receive grants from the government and donations from local businesses.

What a Non Profit Debt Counseling Review Involves

Certain unscrupulous providers are only interested in what they can make from a review. A fundamental part of the non profit credit counseling service is a thorough budgetary analysis. This involves a thorough examination of income and expenditure, assets and liabilities and even a credit report review.

This process resolves personal debt problems for up to 40% of clients. Only when a client cannot be assisted through improved budgeting should they be offered a credit card debt solution, such as a debt settlement program, Debt Management Plan or filing for personal bankruptcy.

Background Research

Always perform plenty of research prior to selecting a service. The Better Business Bureau has a wealth of information available; this is provided by clients who have used various services. Try to deal with well established providers who have received plenty of positive feedback.

Shop About for a Helpful Non Profit Debt Counseling Service

If you aren't happy with the review process because it lacked a proper budgetary analysis or was too orientated towards making a sale, make an appointment with another provider. Remember that the review itself is completely free. There is little to be lost from undergoing several reviews if you deem this necessary.

Never wait too long before visiting a non profit debt counseling service. The sooner you make an appointment, the greater the likelihood of being able to resolve financial difficulties through improved budgeting. If a credit card debt solution is needed, the counselor will discuss this matter with you.

Disclaimer: This article in no way attempts to provide legal, financial or tax advice. One should consult a licensed attorney, tax advisor, or other qualified financial professional before proceeding.