Credit counseling has long been an established part of debt management. Companies that help, for profit or not, to get people out of debt trouble have been around for a long time. The best of them can not only assist you in paying your bills in a timely manner, but can also educate you in helping you avoid such problems in the future. It’s one thing to get out of debt, but it’s far better to stay out of debt once you get past your problems. A recent twist in Federal law has made credit counseling more important than ever - it is now required as a prerequisite for a bankruptcy filing. Filing for debt relief through bankruptcy court is the last resort for someone with more debt than they can pay, but as of 2005, it is now required before you can see a judge about having your debts resolved.

That being the case, the credit counseling industry is now busier than ever. Worse, the influx of business has led to an increase in the number of dishonest people working in the industry. It’s sad when anyone takes advantage of another, but it’s even worse when people take advantage of those who are already deep in financial trouble. How can you tell who is on the up and up when it comes to credit counseling agencies?

Here are suggestions as to what you might look for when meeting a credit counselor for the first time:

Are they approved by the U.S. Trustees? Only those agencies that have this approval meet the required guidelines as a prerequisite for a bankruptcy filing.

• Are they listening to your problems? Or are they simply trying to sell you a plan? A counselor that tells you in the first half hour that they have a plan for you is probably not looking out for you. No one who has just met you knows your situation or your finances; they may simply be out to get what little money you have.

• Beware of any offers of a quick solution. Companies that promise to cut your debts by 50% or more are simply not being any more honest than the people who promise you free grant money. Real counseling involves establishing a repayment plan with your creditors. While they will be able to arrange to get some fees waived or some interest lowered, the bulk of the debt is still yours and you will have to repay it.
• If you mention bankruptcy and they dismiss it, saying that it isn’t necessary, watch out. They may be interested in getting sustained payments from you rather than looking out for your best interests. Like it or not, bankruptcy is sometimes necessary. A good counselor will know that and will know when to recommend it.

If you have questions about a particular credit counseling agency, you should check with your local chamber of commerce or the Better Business Bureau. You might also ask the agency for references. If you know anyone who has had debt problems and undergone credit counseling, you might also ask them for a recommendation. Not all counseling agencies are identical. If you have financial problems, you want a good one.