Dear Dr. Don,
My husband is thinking about talking to a credit counselor and I would like to know how does he go about finding a good one and not get ripped off? What questions should he ask the person? Thank you for any help you can give us.
— Linda Ligature

Dear Linda,
Some services that aren’t really credit counseling are presented as such, so let me make sure we’re talking about credit counseling, not credit repair or debt negotiation.

A credit counselor works with you to help you manage finances and pay down bills. Credit repair is usually best done on your own, not by hiring someone, and debt negotiation is often a poor substitute for a bankruptcy filing.

The FTC’s Facts for Consumers Guide “Fiscal Fitness: Choosing a Credit Counselor” has a listing of suggested questions to ask when interviewing a credit counselor. Rather than repeat them here (it’s a long list), I’ll assign you the homework of reading the full guide.

I’d suggest you work with a not-for-profit credit counselor, but keep in mind that “not for profit” doesn’t mean free.

Although it shouldn’t be the first words out of a credit counselor’s mouth, he or she may recommend you set up a debt management plan to pay down your bills. With a DMP, you make payments into an account and the money is distributed to your creditors. The FTC’s guide discusses DMP plans, too.

Sometimes bankruptcy is a better answer than credit counseling. One provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, however, was to require consumers to work with a credit counselor before filing for bankruptcy.

Another FTC guide, “Before You File for Personal Bankruptcy: Information About Credit Counseling and Debtor Education,” explains requirements of the 2005 act.

Remember, a credit counselor’s point of view is to work with you to pay off your debts. In contrast, when you file a Chapter 7 bankruptcy, the bankruptcy court can discharge your eligible debts.

Finally, the National Foundation for Credit Counseling, or NFCC, can help you find nonprofit credit counseling services in your area.