Debt Relief Companies » Non Profit Debt Relief

Non Profit Credit Counseling – Is It Free?

Scott — Fri, 19 Jan 2007 17:52:56 +0000

The answer depends on what services they provide you with. Non profit credit counseling companies do offer free debt advice but they get paid when they enroll you into a debt management plan. So essentially, one of the services that non profit credit counseling companies provide is debt management plans for consumers with mounting debt problems. These plans help thousands of people every week consolidate debt into a single payment, lower interest rates, reduce their stress, and help them become educated on important family financial budgeting matters.

So What’s Non Profit About It?

The federal government grants non profit status to companies that provide a service that serves the public in a highly beneficial way (including free services), and in exchange they do not have to pay corporate income taxes on their profits.

However, the government enforces restrictions on the amounts they can charge for their paid services, primarily debt management plans.

This is one case where the IRS is on your side (imagine that!). Every credit counseling company’s fee structure is somewhat different, but trust me – reputable companies are very reasonable and helpful for those in need.

What Types of Help Do Non-Profit Consumer Debt Services Provide?

Scott — Mon, 15 Jan 2007 19:50:46 +0000

This is a common question and the words “non profit” cause a lot of confusion. Good non profit consumer debt services will be able to help you consolidate your debts into 1 monthly payment with lower fees and interest rates through their debt management plans. In addition, they should also provide you with family budgeting advice and ongoing financial counseling as you become debt free.

These services do charge a modest fee for their debt management plans but they are also obligated to assist non paying customers with some free helpful debt relief information. Why? Because in exchange for helping people for free or at a marginal cost, the IRS does not require them to pay corporate income taxes. They provide a useful public service and the government rewards them for that.

Through their free educational materials as well as counseling sessions their goal is to teach you about:

debt
personal finance
savings strategies
money management

Their objective is to not just get you out of debt but to make sure you do not return! By teaching people in debt how to improve thier financial standing, non profit consumer debt services do provide a valuable service to those in need. However, please understand non profit does not mean all their services are free!

What Are Non Profit Debt Services?

Scott — Mon, 15 Jan 2007 19:36:10 +0000

You see the TV ads and listen to the spots on the radio all talking about non profit debt services? Sounds great but what are they? Often they are more commonly refered to as credit counseling companies which means they provide a variety of debt solutions based on your situation and needs – debt management being only one of them.

What does their non profit status mean for you?

It means they are regulated by the IRS and in exchange for not paying the ususal corporate income taxes, they must limit the fees they can charge and provide lots of free educational and counseling services. Their mandate is to counsel you first and guide you to the right solution. Sometimes all you need is free debt advice and a little financial education, other times they will steer you towards a debt management solution that will consolidate your debts.

The government mandated status of non profit debt services is really a benefit to you as a consumer because they are constantly being “watched” by the government to ensure they deliver effective debt solutions and proper education to their clients.

Non-Profit Debt Solutions vs. For Profit Debt Solutions – Which to Use?

Scott — Tue, 05 Dec 2006 19:38:29 +0000

To be honest, you should not really be concerned with the profit status of the company you use for debt relief. Non profit does not mean all thier services are free. It’s more important that you discover the type of debt solution that’s best for you and then find a reputable company to help you. Indeed most of the large debt management companies have non-profit status but maybe a debt management solution is not what’s best for you?

Non profit gets overused in marketing because consumers think that means its 100% free. It’s not true.

So do not get fooled into using a company just because they say they offer non profit debt solutions. Certainly non profits are good and worthy of your consideration but they only offer debt management plans and debt management will not work for many people. Lets assume you need debt settlement instead. You will not find a non profit debt settlement company because they do not exist. And if debt settlement is a better solution for your situation then the non profit status is a non-issue and you will need to focus on finding a good settlement company you can trust with reasonable fees.

Don’t fall prey to the marketing hype. Non profit debt solutions are only great if that is indeed what is best for your situation. Use your judgement and careful research to find the debt help you need.