Credit and Debt Counseling
Will my creditors know I have an appointment with you?
In certain circumstances, your creditor may contact us to verify your appointment with an NFCC-member agency. For example, this may happen if you tell a creditor you have an appointment or if the creditor referred you to one of our local agencies.
Your credit counselor will only reach out to your creditors if you set up a debt management plan or other payment plan.
Will credit counseling stop legal action and creditor phone calls?
Credit counseling can potentially stop creditors from contacting you or taking legal action against you. Depending on the services you receive, we may work with you and your creditors to develop a debt management solution that satisfies both parties. If you maintain your part of the agreement, their phone calls and other collection actions are likely to stop.
Where can I meet with my counselor? Does it have to be in-person?
Our member agencies want to make it as easy as possible for you to receive help. Credit counseling services are available online, in-person or over the phone. You can schedule an appointment by visiting our Agency Finder page or by calling 800-388-2227.
What is the Fair Debt Collection Practices Act (FDCPA)?
The Fair Debt Collection Practices Act (FDCPA) is a federal law that makes it illegal for debt collectors to use abusive, unfair or deceptive tactics to collect your debt, including:
- Harassing or threatening you
- Disclosing what you owe to anyone but your attorney
- Making false statements, like lying about how much you owe or the consequences you could face for not paying
The FDCPA also requires debt collectors to give you “validation information” on request. If you request validation of a debt, they must give you details such as their name and the amount you owe, within five days.
What is a judgment?
A judgment is a court order that lets a debt collector take specific action to collect your debt. If a debt collector sues you and wins a judgment, you could face any of the following consequences:
- Wage garnishment
- Bank levy
- Property lien
If you receive a notice stating that a creditor or debt collector intends to sue you for a judgment, it’s important to respond. Ignoring the lawsuit could result in losing by default and owing even more money.
What is a “charge-off?” If my debt has been “charged-off,” can a creditor pursue collection?
When a creditor “charges-off” your debt, it means they’ve written it off as a loss. A creditor will charge-off your debt if they believe you no longer intend to pay. This usually happens once you’re behind on the payment by 90 to 180 days.
When your debt is charged-off, the creditor either transfers it to a collection department or sells it to a debt collector. Once the record of the charge-off appears on your credit reports, your credit scores are likely to take a big hit.
After the charge-off, you’re still legally obligated to pay the debt to the new account owner, but only for a set period of time determined by your state. This timeframe is also known as the statute of limitations. Before that time frame is up, the debt collector can potentially file a lawsuit against you in order to collect the debt.
What happens when I contact an NFCC Member Agency?
When you contact an NFCC member agency, you’ll be asked some intake questions to help determine which credit counseling services are the best fit for you.
You can also ask questions, make an appointment to meet with a counselor (in-person, online or by phone) and get advice on how to prepare for your counseling session. For example, you may be encouraged to gather certain financial documents ahead of time.
What do NFCC members charge for counseling services?
Most NFCC-member agencies offer free credit counseling and educational resources. Some agencies charge for specific services, and the fees vary depending on the agency and state laws. You may be able to qualify for a fee waiver for bankruptcy counseling or for your debt management plan (DMP) based on your income or military service.
What are the benefits of working with Certified Consumer Credit Counselors?
Certified Consumer Credit Counselors are experts who can offer you guidance on a wide variety of financial topics. NFCC-certified credit counselors can help you establish financial independence by sharing personalized tips for improving your situation, or by guiding you as you recover from an emergency.
Here are some of the main ways they can help:
- Free and low-cost support
- Judgment-free advice
- Professional tips tailored to your situation
- Expertise on credit scores, budgeting, debt management, homebuying, student loans and more
My wages have been attached. What does that mean?
When your wages are attached or garnished, money is taken out of your paycheck to pay back your debt. Wage attachments usually happen as the result of a creditor suing you and winning. An attachment can also be the result of filing Chapter 13 bankruptcy, or having unpaid student loans or child support.
If you have a wage garnishment, your employer will receive an order to begin withholding part of your compensation immediately.
My creditors won’t reduce my payments. Can you really help?
Even if your creditors refuse to work with you, they will often work with us. An NFCC-certified credit counselor has tools that make it easier to get creditors on-board. Your counselor will evaluate your overall financial situation, offer advice, determine what you can afford to pay and even work with your creditor to find a solution.
If you qualify for a debt management plan, for example, your creditors may agree to reduce your payments, lower your interest rates or give you more time to pay the debt.
My car was repossessed and sold. Do I still have to pay off my auto loan?
After your car is repossessed and sold, there’s a chance you still owe money to your lender. If the sale price on the car did not cover the remaining balance on your loan (plus all fees) you will owe what’s called a “deficiency balance.”
If you owe a deficiency balance, you may be able to set up a payment plan with the lender or offer the lender a lump sum settlement. Failing to pay, however, could result in a lawsuit from the lender or a debt collector.
My agency is interested in becoming a member of the NFCC. Where do I find information about the application process?
You can find information about becoming an NFCC member agency on our Prospective Members page.
I need help and would like to contact a financial counselor. How do I find an NFCC member agency?
You can locate an NFCC member agency in your area by visiting the Agency Finder or by calling 800-388-2227.
How do I become a credit counselor?
Our Counselor Certification Program is only available to employees of NFCC member agencies.
To become a Certified Consumer Credit Counselor, you’ll need to demonstrate an understanding of the theories, principles, issues, counseling techniques and forms applicable to credit and financial counseling by passing the counselor certification exam. The counselor certification exam covers the following subjects:
- Basic counseling principles
- Budgeting
- Credit
- Collections and debt management
- Consumer rights and responsibilities
- Bankruptcy
To maintain certification, the counselor must obtain a minimum of 20 Professional Development Units (PDUs) every two years. PDUs are accumulated through such activities as direct counseling, association memberships, attendance at workshops and conferences, teaching, publishing and research activities.
How are credit counseling agencies funded?
The NFCC’s member agencies receive funding from a variety of sources, including government and foundation grants, voluntary contributions from creditors who participate in our debt management plans, fundraising, and client fees for certain services.
Do most creditors contribute to the agency?
Many creditors support the work of the NFCC through voluntary contributions. If your creditor does not contribute, we will still work with them to improve your payment terms on a debt management plan.