Choosing a credit counseling agency

Most people are embarrassed to admit financial problems, so they don't just ask around for a good credit-counseling program. Here are a few suggestions to make it easier, without making the problem worse:

• Look for a nonprofit firm. Nonprofits get most of their funding from creditors or donations. The nonprofits' relationship with the debt community also means they can often negotiate better rates on your behalf. But not all nonprofits are created equal!
• Find out upfront exactly what services you'll receive, such as counseling, a debt-repayment plan, education and budgeting advice. You might want to get it all in writing before you proceed. Find out exactly what they are going to charge you if you go with a debt repayment plan. This would be a start-up fee and any monthly fees that you would need to pay.
• Ask if the organization belongs to any groups, such as the NFCC or the Better Business Bureau of Wisconsin. Find out if the agency is accredited. Have them explain how they're audited and if your funds are protected. Any debt repayment agency doing business in Wisconsin must be licensed in the state. If they are not licensed here the fees could be much higher that allowed by Wisconsin law.