Frequently Asked Questions about Debt Counseling
Here are the answers to the most commonly asked questions about debt counseling.
What is debt counseling?
On our site, we use debt counseling to mean a service provided by a for-profit debt consolidation or credit repair agency. The goal of our credit counseling affiliates is to help you get and stay out of debt as quickly as possible. In some cases, a debt counselor may provide the same services as a credit counselor, who is a certified professional working for an accredited credit counseling service.
What services will my debt counselor provide?
We can match you with a number of debt counseling agencies, all of whom provide different services. We will connect you with the service that can best meet your needs. Some of our debt counselors specialize in debt consolidation, while others have more experience with credit repair. Whatever kind of debt solution you need, we can help you find a trusted company that offers it.
Are debt consolidation and debt counseling the same thing?
No, debt consolidation and debt counseling are two separate services. However, the same agency may provide both services. On the one hand, debt consolidation is an intervention designed for people with large amounts of high-interest debt. Consolidation packages all of the consumer's debt into a single payment to make repayment faster, easier, and more affordable. On the other hand, debt counselors provide a more comprehensive service. They can still provide services like debt consolidation, but they may also offer budgeting advice and money management guidance to supplement their debt intervention efforts.
How much does debt counseling cost?
The price you will pay for debt counseling will depend on your agency and the nature of the services for which you sign up. For-profit debt counselors tend to charge more than non-profit counselors because they work on a commission basis. With a for-profit counseling agency, you will likely have to pay a one-time commission charge up front in addition to recurring monthly fees. A not-for-profit counseling service, on the other hand, will not charge you commission and will likely work for little or no fee.
Do I have to have a certain amount of debt to qualify for debt counseling?
You should ask your agency about this, as all companies will have different eligibility criteria. Some consolidation-oriented debt counselors will require their clients to have a minimum amount of unsecured debt to be eligible. However, some debt counselors have no qualification requirements of their clients except a desire to overcome debt.