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Getting Out of Debt

Honest Credit Repair

How to locate advice you can trust.

Credit counseling is a fine idea. The government thinks so highly of it that the law now requires you to get credit counseling within six months of filing for bankruptcy.

Trouble is, the field has more than its share of shady operators who charge hidden fees, misrepresent their nonprofit status and offer questionable advice. Now a new source can steer you to a reputable counselor. The U.S. Trustee's office vets credit-counseling agencies and lists 132 approved firms in the Credit Counseling & Debtor Education section of its Web site. You'll find contact information and Web addresses, plus you can see if a firm does business in person, over the phone or online.

Look for fees of $50 or less (sessions limited to budgeting generally cost less than $20). A counselor meets with you for 60 to 90 minutes, reviews your financial situation and offers budgeting advice. Avoid agencies that press you to enter a debt-management program, under which you give your bills and payments to the agency, which in turn pays your creditors and negotiates debt relief, if necessary. Some agencies focus on this arrangement because creditors pay them to sign up consumers.