Illinois Department of Financial & Professional Regulation Illinois Department of Financial & Professional Regulation
Bryan A. Schneider, Secretary  
Bruce Rauner, Governor
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Choosing a Debt / Credit Counselor

Debt and/or credit counselors offer an important service to consumers swamped with debt. Consumers who have a difficult time staying within a budget may simply need a financial counselor's help to examine spending habits and how to follow sound budget advice. Other consumers may have suffered a major setback, such as a job loss, and need a debt-management programs (DMP), which is a plan a financial counselor puts in place to lower and eventually eliminate a consumer's debt. A reputable debt counselor will carefully examine a consumer's debt situation and suggest the best plan of action, but a caveat is in order.

All debt counselors are not created equal. The quality of counseling services may vary considerably from one counselor to the next. Additionally, the industry presently has no federal licensing requirements and only 17 states have laws regulating them (the Division of Financial Institutions oversees debt management services in Illinois.

People who have received unprofessional credit counseling services complain that

  • they owe more debt after the counselor's services
  • bankruptcy was the best option for their financial situation, but they were steered into a debt-management program
  • the counseling agency did not make sure creditor payments were sent within the billing cycle, so consumers received late fees
  • in some cases, the credit counselor took consumer money but did not pay creditors at all

Consumers should also be aware that credit counseling agencies were set up for the benefit of both consumers and the credit industry, so credit counseling agencies can be properly viewed as a more friendly collection agency. Creditors pay credit counselors a percentage of the money recovered from consumers so there is a strong financial tie.

The system, nonetheless, benefits everyone when consumers are offered sound advice and professional services to help them get out of debt. Bottom line: a good credit counselor will help solve one's financial problems.

This is how to sort the professional agencies from the unprofessional agencies.

Do some homework

First, locate some of the nearest non-profit credit counselors.

The Department of Financial Institutions. Call 312-814-5145 (Chicago) or 217-782-3704 (Springfield) or go to its web site here.

Locate the nearest member agency of the National Foundation for Credit Counseling (NFCC) at

Locate the nearest member agency of the Association of Independent Consumer Credit Counseling Agencies (AICCCA) at

Second, check the complaint records of local non-profit credit counselors to determine if you want their services.

Better Business Bureau
Call or go to its web site:

Illinois Attorney General's Office
Call 1-800-386-5438 (Chicago) or 1-800-243-0618 (Springfield) or go to its web site at

Good Questions to ask the Credit Counseling Agency before you receive its services

  1. Will the agency refund fees if the services received are not satisfactory?
  2. How much training do counselors at the agency receive?
  3. Is the agency accredited by a trade association such as the National Federation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA)?
  4. Does the agency have an independent board of directors?
  5. Does the agency keep clients funds in a trust account, separate from its operating funds?
  6. How long has the agency been doing business in this area?
  7. What types of services does the agency offer?
  8. How long will it take to complete a debt-management program (DMP)?
  9. What effect will working with a counselor have on my credit rating?
  10. Are agency services confidential?

The two largest Credit Counseling Trade Associations

The National Foundation for Credit Counseling (NFCC).

Association of Independent Consumer Credit Counseling Agencies (AICCCA).

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