Consumer Credit Counseling Programs

December 19th, 2009 | Posted in Bankruptcy, Debt Reduction, Debt Relief

One question that comes up often when talking about debt relief and debt settlement is consumer credit counseling programs. The idea of credit counseling is often misconstrued, misunderstood, and mistrusted for all of the wrong reasons. From that, we wanted to take some time to talk about credit counseling.

In this article we will cover what consumer credit counseling is, the various forms it may take, and we’ll help you to get rid of some misconceptions you may have had about credit counseling in general.

Consumer Credit Counseling – Definition and History

The first thing we need to cover is what consumer credit counseling is. In general it is a process offering education to consumers about how to avoid incurring debts that cannot be repaid.

The process itself actually entails more than educations, and usually credit counseling often involves negotiating with creditors to establish settlements on existing debts. The concept of credit counseling was established in the 1980’s as was proposed created as an alternative to bankruptcy for consumers who could not meet their monthly obligations.

In the early 1990’s credit counseling began to get a bad rap in the U.S. At the time credit counseling agencies were springing up all over the place, and some of them actually worked more for creditors rather than consumers.  This led to an antitrust lawsuit against the National Foundation for Credit Counseling, or NFCC, and the need for better legislation led to some of the associations that manage debt negotiations today. It also led the FTC (Federal Trade Commission) to file lawsuits against several credit counseling agencies.

This bad reputation is what makes some people cringe at the thought of credit counseling today. However the reputation is mostly undeserved. Â In the world of consumer credit counseling today, the various associations that regulate debt negotiations have led to better debt settlement agencies.

Consumer Credit Counseling Programs

Consumer credit counseling programs provide a viable, and better, alternative to bankruptcy. But, and yes there is a but, the FTC still recommends that you research the company who you use for credit counseling services.

This is actually one of the reasons why we started this site, and why we take the time to share information with you on debt relief. Our reviews of the top three debt relief companies, provide you with three companies that can help you choose the right consumer credit counseling program, and who will work for you to get the best results possible (and relieve your debts faster).