Today it makes sense to set up a non profit credit counseling agency because the non-profit tag bestows several benefits upon the agency. The biggest advantage is federal tax exemptions. These exemptions, when they are combined with the tax exemptions extended by most American states to the non-profit counseling agencies, work out to thousands of dollars every year. What’s more the non-tax status makes these counseling agencies eligible for several public and private grants too.
Creditors too treat non profit agencies with greater respect because the non-profit status is mandatory to initiate Fair Share contributions. As if this was not enough, in some states the non-profit status puts these agencies beyond the reach of consumer protection laws.
It is therefore not a surprise to see almost every major credit counseling agency flaunting its non-profit status. It is another matter that most of these counseling agencies have been set up to make profits only. They look upon their non-profit tag as a useful way to lure customers. The debtor, who is looking for help and advice, is carried away by the fact that the counseling service is a non-profit service. It is only when the debtor starts dealing with these agencies that he realizes their real worth, and interests.
However, this does not mean that every credit counseling agency is a charade. There are several counseling services that provide genuine and authentic advice. Most of these services are accredited with either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
Another place to enquire about genuine counseling services is the local Better Business Bureau. The debtor can visit the bureau to check if there are any complaints against the agency. Online credit forums too are useful sources of obtaining information about credit counseling services.
All debtors must remember that good credit counseling agencies are a boon for them. They assist the debtors to create personalized budgets and possibly debt management plans. They also work with creditors to lower or eliminate interest, finance charges and late payment penalties. Some even get the debt collectors off the back of hapless debtors.
These are big advantages, and a debtor must look for a non-profit counseling service to get out of debt. The only thing is that the debtor must choose the service with care. There is no point in dealing with sharks operating in the name of credit counseling companies.