- 6 min read
- Debt counseling can be either credit counseling or debt settlement.
- Whichever strategy you chose, you need to learn which provider will offer what YOU need.
- This handy table will guide you to the partner who meets your needs.
Learn the 15 Top Criteria You Should Use to Find the Best Debt Counseling
The best debt counseling services have 15 characteristics in common. We summarize these key 15 items in a table here, and explain how to suss-out the facts about your potential debt counseling service provider.
Before we begin, it is important to note there are good debt counseling service providers who are eager to earn your business. There are also fly-by-night operators who take advantage of customers who did not do their homework before signing up and paying for services they will never receive. A pretty Web site or catchy TV ad does not make a company trustworthy, but those two items are not signs of a scam, either. By the time you are done with your shopping, you will find a debt counseling services that is an effective partner in your achieving debt freedom.
What is Debt Counseling?
Debt counseling can be credit counseling or debt settlement. If you do not know whether credit counseling or debt settlement is right for you, stop now and visit the Bills.com Debt Coach. This no-cost, no-nonsense service analyzes your debts and presents your debt resolutions options, including the costs of and time needed to complete each. Once you chose the type of debt resolution plan that suits your needs best, it is time to chose the right partner.
A debt consolidation partner can help you resolve your debts.
Best Debt Counseling Services
Make a list of four credit counseling or debt settlement candidates. Bills.com can help you find a pre-screened partner. Call each, and go online to learn how each company ranks on the 15 items we list in the table here. You may want to rank each of these on a 1-5 scale, or cross-off some of the items on this list if they do not apply to you.
|Bills.com Debt Counseling Compare-O-Matic
|Helpfulness and Quality of Online Tools
|Online Presence — Chat, Instant Messaging, E-Mail
|Quality of Budget Worksheets & Other Materials
|Company Employees Speak Your Native Language
|Helpful Articles and Resources on Company Web Site
|Active Blog Containing Useful Information
|Helpful Videos Online
|Quality of Counseling
|Number of Years in Business
|Cost — Startup per Account
|Cost — Monthly per Account
|Disclosure of Program’s Pluses & Minuses
|Online Complaints (Take with grain of salt)
How to compare debt counseling services. Grade these using your own scale and weight of each item.
Helpfulness and Quality of Online Tools
Take a test drive on the company’s Web site to learn how many tools it provides, and the overall helpfulness of each. One great tool that provides insight is better than several mediocre tools.
Online Presence — Chat, Instant Messaging, E-Mail
Some people work best when talking to a live voice on the telephone. Others do equally well or better with an online chat conversation or a-mail exchange. If you are an online chat person, give weight to a company offering chat or instant messaging.
Quality of Budget Worksheets & Other Materials
Online is not everything. Ask about what paper materials the company offers. If you like workbooks and paper forms, give weight to a partner specializing in paper materials.
Company Employees Speak Your Native Language
If English is not your native language, then find a company that speaks your language. Note that some providers have off-shored their call centers outside of the US. Ask if your potential partners where their call centers are located.
Helpful Articles and Resources on Company Web Site
A lively and rich Web site will contain articles, how-tos, and other helpful and current content. Spend a few minutes on each provider’s Web sites to learn if they provide useful information. Note some information may be behind a login screen that only customer’s can access. Ask how much is "behind the scenes" for paying customers.
Active Blog Containing Useful Information
Does the company reach out to its customers with weekly or monthly newsletters or columns? Ask to see sample newsletters or blog postings.
Helpful Videos Online
Video can be a powerful tool to convey information about personal finance. If you are a visual learner, lean towards a partner that relies on video.
Quality of Counseling
Ask how much time the company expects to spend counseling each customer. This is key if poor budgeting habits got you into financial trouble. This is less important if a one-time event handed you a mountain of debt.
Number of Years in Business
Generally speaking, the longer a company has been in business the better the chances are this is an effective, helpful partner. However, time in business should not be your No. 1 or exclusive criteria because newer companies may provide more innovative services.
Look for membership in the National Foundation for Credit Counseling (NFCC), Association of Independent Consumer Credit Counseling Agencies (AICCCA), United States Organizations for Bankruptcy Alternatives (USOBA), or the American Fair Credit Council (AFCC). Membership with NFCC, AICCCA, USOBA, or AFCC does not guaranty you will receive good service. However, membership in these industry groups at least tells you the company agrees with industry best practices, and is opening its practices to scrutiny from its peers.
Cost — Start-up per Account
What is the enrollment cost per account? Sometimes, this is capped by state law. In the case of debt settlement, you may not be charged for any fees until the account is settled
Cost — Monthly per Account
Monthly cost per enrolled account varies. Ask what you should expect to pay each month.
Any easy question to answer. If the person you speak to is trying to convince you to enroll before answering your questions, you are dealing with a sales-oriented and not a service-oriented company. There are no "today only" deals in debt counseling services. The right deal for you today will be the right deal for you tomorrow.
Disclosure of Program’s Pluses and Minuses
Every debt counseling service plan has positives and negatives. Smart, service-oriented debt counseling services explain both. If you feel like your concerns are being glossed over, then grade this potential partner down.
Online Complaints (Take with grain of salt)
Look at the BBB ratings for each provider. Search for complaints about the company. Keep in mind, however, people may write things in an online rant in the heat of the moment. Some online complaints are simply not fair. Do note if you see a consistent pattern of complaints regarding customer service or billing surprises.
A top potential partner will emerge by the time you finish your shopping. Remember, a your needs may not match those of your friends, neighbors or people who offer their opinions online about what they think the best debt counseling services may be. After you pick a partner, follow the plan you create together confident you chose the best debt counseling service to meet your needs.
Struggling with debt?
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
The amount of debt and debt in collections vary by state. For example, in Tennessee, 32% have any kind of debt in collections and the median debt in collections is $1892. Medical debt is common and 18% have that in collections. The median medical debt in collections is $888.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.