Non profit credit counseling provides several benefits
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
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.