ABA Family Legal Guide

Consumer Credit

Debt, Debt Collection, and Credit Repair

Credit Counseling

What kinds of services can I get from a credit counseling center?

Most specialized counseling offices provide two types of services. First, they can help you set up a realistic budget so that you can manage your debts better. Second, if you still have trouble paying your debts on time, the center will contact your creditors and arrange a repayment plan based on your budget. You will make a single payment each month to the center, which will then distribute the payment among your creditors until it pays all your debts in full. Most creditors prefer this type of plan (since they will eventually get most of their money) rather than "straight" bankruptcy. While many credit grantors agree to such arrangements with CCCS offices, some will not work with for-profit counseling offices.

Under a repayment plan through a CCCS, you may still have to pay finance charges on your debts. However, many creditors will waive (not require payment of) finance charges and delinquency fees after you have agreed to repay your debts through a CCCS.