Credit Counseling

DEFINITION of 'Credit Counseling'

Personalized counseling services that provide guidance and support for those who have gotten in over their heads financially. The objective of most credit counseling is to help the creditor avoid bankruptcy, as well as provide basic education on financial management. Many counseling services also negotiate with creditors on behalf of the borrower to reduce interest rates and late fees.

BREAKING DOWN 'Credit Counseling'

Bankruptcy law mandates that anyone filing for bankruptcy must first undergo credit counseling before being approved. Many counselors charge reasonable fees for their services, but the consumer counseling industry is fraught with misrepresentation and even fraud. As such, those who seek a credit counselor should avoid any company that charges large upfront fees or make unrealistic promises. In addition, legitimate credit counseling firms are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

RELATED TERMS
  1. Counseling Liability

    Liabilities from the provision of counseling services.
  2. Cumis Counsel

    Legal counsel chosen by the insured when the insurer has a conflict ...
  3. Counsel Selection Provision

    A liability insurance provision that allows the policyholder ...
  4. Investment Counsel Association ...

    A non-profit organization whose members work in the investment ...
  5. Chapter 7

    A bankruptcy proceeding in which a company stops all operations ...
  6. Chaplain Malpractice Insurance

    Liability insurance that provides coverage for chaplains, priests, ...
Related Articles
  1. Retirement

    Find the Right Reverse Mortgage Counseling Agency

    How to hook up with a counselor who can help you make the right decision about this trickiest of financing vehicles.
  2. Markets

    Take A Bite Out Of Counsel Corporation

    Some micro caps, such as Counsel, fly under the radar but offer the potential for big returns.
  3. Personal Finance

    How To Find The Right Credit Counselor For You

    Paycheck to paycheck is no way to live. Learn how to find the help you need.
  4. Retirement

    Should You File For Bankruptcy?

    Find out how to determine whether this option will help or hurt your financial situation.
  5. Personal Finance

    Prevent Bankruptcy With These Tips

    This financial decision should only be used as a last resort. Find out how to avoid it.
  6. Investing

    When To Declare Bankruptcy

    When is bankruptcy the best or only route– and when is it better to look at alternative solutions? And should you always hire a lawyer?
  7. Investing

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  8. Investing

    Buying a House After Bankruptcy? It Is Possible!

    Buying a house after bankruptcy is not impossible. It just takes time to repair your credit score and demonstrate you're a good risk for a mortgage.
  9. Personal Finance

    Credit Scams To Watch Out For

    More than 30 million people were victims of fraud in 2007. Will you be next?
  10. Investing

    Changing The Face Of Bankruptcy

    A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you?
RELATED FAQS
  1. What are some examples of a debt management plan (DMP)?

    Learn about some of the different types of debt management plans, and what you should look for when you evaluate a credit ... Read Answer >>
  2. When will bankruptcy be removed from my credit history?

    I filed for bankruptcy 10 years ago in November. Firstly, I do not know which category I applied for. ... Read Answer >>
  3. What are the financial consequences of filing for bankruptcy?

    Learn about the various consequences, both positive and negative, that you can expect to result from your filing for bankruptcy. Read Answer >>
  4. Debt Counseling: 4 Signs You Need Help

    Stop stressing about debt and bills and avoiding phone calls from debt collectors. Get help from a debt and credit counselor ... Read Answer >>
  5. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Answer >>
  6. What is the difference between available credit and credit limit?

    Explore the difference between available credit and credit limit and the implications different account balances have on ... Read Answer >>
Trading Center