ABA Family Legal Guide

Consumer Credit

Debt, Debt Collection, and Credit Repair

Credit Counseling

Are all financial counseling services the same?

No, there are nonprofit and for-profit financial counseling centers. The National Foundation for Consumer Credit provides leadership for about 1,470 nonprofit consumer credit counseling services (CCCS) throughout the United States. CCCS offices get most of their fees from credit grantors, but will typically charge consumers a small fee for setting up a budget plan. Hence, the costs to you may be lower than those of for-profit centers, which must cover all their costs from charges to consumers who use the center's services. However, it is possible that because of the source of their funding, nonprofit centers may favor arrangements that benefit creditors the most.

While many for-profit financial counseling centers provide worthwhile services, some may exaggerate the benefits that they promise. For-profit centers receive all of their compensation from you. For this reason, they tend to be more expensive than CCCS-affiliated nonprofit services.

Counseling services seldom recommend bankruptcy, even that is the best option for you. It might be wise to consult a lawyer before calling a credit counselor.