Dear Dr. Don,
I’m looking for a good debt counselor. Where do I find a reputable firm?
— Kim Credit

Dear Kim,
Consumer credit counseling can consolidate your debts and work out a repayment plan. The counselor also may be able to reduce the interest rates on your debts.

Taking this step will damage your credit history because your credit report will show that your accounts were not repaid according to the terms of the credit agreements. Don’t take this step lightly, but if you can’t keep up with your bills this is an alternative to bankruptcy.

The Federal Trade Commission has information that will help you choose a credit counselor. This is required reading before you take any other steps. You can also learn more about credit counseling on the National Foundation for Credit Counseling Web site.

Check out firms on the Better Business Bureau’s Web site. Remember that even though many of these firms are registered as nonprofits, that doesn’t mean that you won’t have to pay for their services. Make sure you understand the costs along with the potential benefits before signing a contract with a counselor.

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