Debt Counseling Services: Non-Profit vs. For-Profit

Facing an impending financial crisis due to unmanageable credit card or other debts can be a stressful situation for many people. Fortunately, there are many credit and debt counseling programs available to help people navigate a path through this frightening and intimidating storm. While most of these credit and debt counseling services are offered by businesses looking to earn profits, many are available through non-profit organizations. Both for-profit and non-profit credit and debt counseling options offer advantages and disadvantages. The services each kind of organization is able to provide vary considerably. It pays to examine each carefully to find the type that best matches your unique situation.

Non-profit credit and debt counseling agencies exist to provide expert advice and to help consumers find ways to better manage their incomes and expenses. They offer their services completely free of charge and are understandably limited in terms of what they can do for you beyond talking to and advising you. For folks who really just need someone trained in financial areas to assist them in setting up workable budgets and to design debt repayment plans under their existing conditions, a non-profit credit and debt counseling agency is probably the best choice. If, however, you find yourself in dire financial straits and require urgent assistance, a for-profit credit and debt counseling company might be the way to go.

While for-profit credit and debt counseling companies will charge you fees and interest charges for their services, they may have a better chance of reducing the amount of the principle balance you owe to each creditor. Consider that the company will work hard to negotiate with your individual creditors to get them to reduce the amount you owe. Add to that the fact that you will most likely be paying a much lower interest rate to the credit counseling company than you are currently paying on your credit card debts. Finally, imagine only writing one check each month (to the credit counseling company) instead of all those checks to each creditor. The overall picture is one where both you and the credit and debt counseling company will come out winners. Just be sure to compare the reputations, services and prices at each company you’re considering before making a final decision.