Debt Management Basics
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FAQ about debt and credit counseling

If you're in debt, you're not alone. According to the Federal Reserve, Americans are in $1.98 trillion of debt -- that's more than $18,000 per household. If your debt is overwhelming, you can seek help from a debt or credit counselor. But who do you ask and how do you know if he or she has your best interests in mind?

We've gathered the most frequently asked questions about debt and credit counseling. They should help you on your way to a more stable financial future.

When do I know I need debt counseling?
There is no specific amount of debt -- whether it's $5,000 or $50,000 -- that denotes you need a debt counselor. You need to consider how much income you have each month, what your expenses are and what your financial plans are. If you can plan a way to get out of debt yourself, that may be your best bet. If you feel helpless, overwhelmed or can't figure out a plan, you may need debt counseling.

How do I find a good debt counselor or credit counselor?
When shopping for help, either for a credit counseling agency or a debt consolidation agency, keep in mind that just because a company claims to be nonprofit, doesn't mean it has your best interest at heart. Be wary of a company that immediately urges you to join a debt management plan -- they should take an interest in your particular issues, not throw you toward a cookie-cutter plan. And like any other big decision, shop around and ask for all prices and fees to be stated up front and put in writing.

Bankrate has more in-depth tips on finding someone to assist you with your debt.

What should I be careful of when consulting a debt negotiator?
If you're not careful you may find a company that will promise to ease your debt -- but actually put you deeper in the hole. Some debt negotiators charge hefty fees. But that's only part of the problem. Your credit takes just as much of a hit as your wallet.

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