What should a person do when facing seemingly insurmountable debt? For many Connecticut residents, seeking the advice of a financial adviser or credit counselor is a step in their debt management process. Those looking to bring in a professional should be aware of the difference between credit counselors who are independent or nonprofit advisers versus those who work for a financial institution.
According to the Federal Trade Commission, nonprofit firms are typically the most reputable when it comes to credit counseling. However, even if a credit counselor claims to be nonprofit, Connecticut residents should do more research before asking someone for help with their debt management. High fees and unqualified advice may still be present in organizations claiming a nonprofit status.
Before meeting with a credit counselor, it is a good idea to verify the counselor's accredation. For example, the person or organization may be a member of the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of American (FCAA). These accreditations mean that the credit counselor has agreed to abide by certain guidelines. Even with these qualifications, clarifying the exact services and the cost of those services is critical before bringing on a professional.
Often, Connecticut residents looking to involve a credit counselor in their debt management process can end up with another bill to pay rather than a full solution. This is particularly possible if the debt involved is too high for financial advice alone to resolve. Those facing such substantial debt management issues may find it more helpful to reach out to a lawyer to understand their options for filing for bankruptcy under Connecticut law.
Source: wisebread.com, "8 Questions to Ask Before Hiring a Credit Counselor", Holly Johnson, April 26, 2018