Credit Counseling - Your Option to being Debt-Free

Because of mass of debtor markets pining deliverance from their financial woes, there's a thriving industry for debt relief that have become the last recourse for many that is short of declaring personal bankruptcy.

These are your

credit counseling

firms, whether for profit or non-profit that essentially promises desperate debtors some financial relief. Some have done a satisfactory job of lifting the debt burden on many people. But there are also more failures which are seen by the fact that more than 10 million Americans filed for bankruptcy every year.

The recent amendments to the bankruptcy laws such as the new Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) has made it difficult for debtors to file for chapter 7 bankruptcy without first passing a rigorous test from accredited debt or

credit counseling

firms..

Doing it Yourself

Just bear in mind that whatever

credit counseling

firms can do for you, you can also do it yourself. You can negotiate with your creditors on your own especially if you have a tried and tested negotiation skills to lower down the interest charges.

But you are facing not just one or two creditors; you will need to find the time and the patience to negotiate with all you creditors. If you have the discipline to be able to apportion you payments to all your creditors, then go ahead. But for most people, leaving it to the experts is often the better alternative if the services are reasonable enough. This is the reason why many debt relief and counseling firms have sprung up like mushrooms. The American middles class is so used to getting other people do the dirty job for them.

Exercising Caution

Just like in any service industries, there are scammers in the debt relief business which can worsen your debt condition than when you started. A recent online study have revealed that more than 80% of online debt relief and counseling firms are just there to milk the debtor with no real benefit to them.

Desperate people can be quite gullible to the snares of these debt relief firms whose service charges can offset or exceed any financial benefit in dealing with them. This is an unregulated industry and buyers are advised to be on the cautious side. Here are some things you can do to protect yourself:

• Don't be fooled by debt counseling site claiming to be a member to this or that chamber of commerce. Anyone can be a member of any chamber of commerce.
• Check if they have at least 10 years in the debt relief business and ask around. The longer, the better. The recent financial crises have spawned new debt relief firms hoping to cash in on the hapless debtor markets over the last 3 years. So it's best to keep way from new debt relief and counseling firms.
• Finally, make sure the firm you plan to deal with is a member of the BBB or the Better Business Bureau. It doesn't guarantee success, but you can be sure it's no scammer.

GP