Nonprofit Credit Counseling (NFCC member agencies)

What this actually is

If you have been shown "debt settlement" offers quoting a 14%-25% ENROLLMENT FEE, understand what that fee is: a percentage of the debt you enroll, paid to a for-profit company. A nonprofit credit counselling agency will review your whole budget at no charge, and a debt management plan typically costs a small monthly administrative fee rather than a percentage of the balance. Know also that under the FTC Telemarketing Sales Rule, 16 C.F.R. section 310.4(a)(5), a debt relief company that sells to you by telephone may NOT collect any fee before it has actually settled a debt. Several states bar the practice outright, which is why those offers list state exclusions.

Who qualifies, and what trips people up

Open to anyone; no minimum debt. Initial counselling session is free. Ask any agency whether it is a 501(c)(3), what the monthly fee is in dollars, and whether it is paid by the creditors.