Most people wonder why they have to pay for a credit counselor who works on a non-profit basis. This credit counseling FAQ is probably the most commonly asked one and it is not surprising why! Most individuals who are looking to hire a credit counselor to help them draw out a money or debt management plan are already low on finances. Writing out a check towards the credit counselor's fee may not make sense as they feel that they might be better off using that money to pay off a small portion of their debt. Here are some commonly asked FAQs that will help understand the reason why you have to pay non-profit credit counselors.
Credit counseling FAQ - Do non-profit credit counseling agencies operate as a free service to the debtors?
The answer is obviously no. A credit counseling agency is labeled non-profit not because they have federal sanctions and endorsements, but simple due to the fact that that they have filed for property tax. These agencies charge debtors since they too have payments to make for utilities and pay their employees.
Credit counseling FAQ - Does the non-profit credit counselor incur any costs for these services?
The services provided to you by the non-profit counselor involve a significant amount of administration costs. Therefore, while an individual is justified in questioning why he has to pay for a non-profit service, he must understand that there are certain costs incurred that need to be reimbursed. These are, after all, costs incurred on your behalf in negotiating with banks and financiers.
Credit counseling FAQ - Why should I pay for a service, which I can undertake on my own?
Of course, you can undertake this exercise on your own and try to negotiate with the banks and credit card companies to reduce your debt, but you will soon realize that the non-profit counselor as a neutral party will be able to do a better job. After all, he is qualified and certified to do the job.
Credit counseling FAQ - How do I choose a non-profit counselor who has my best interests in mind?
It is important to choose the right non-profit counselor and get all the expected services from him. Several so called non-profit counseling agencies end up making large profits as they are paid by the creditors to collect the money on their behalf and might work toward recovering debts rather than giving you sound financial advice for the future. A list of approved budget or non-profit counselors exists. They are authorized by the government to offer service to individuals who are required by law to undergo counseling before they are eligible to file for bankruptcy protection. You can hire a counselor from the approved list (even if you are not filing for bankruptcy) to assure yourself that he will focus on getting you out of debt profitably.
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