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Credit Help > Credit Help Non Profit Agency Will Help You; Not Really
Credit Help Non Profit Agency Will Help You; Not Really |
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Many credit help agencies take on the garb of being non-profit organizations, whereas they are far from it. Read on to find out how to distinguish the appropriate one from the others. There are various situations such as job loss, divorce or unexpected medical bills that lead a person into debt. Much non-profit credit counseling agencies that help consumers to manage their debt or credit repair also exists. However, you should be cautious when taking credit help with the help of a credit counseling organization, as per the advice of FTC, IRS and other state agencies. There have been an increasing number of complaints to them that many credit counseling organizations are engaging in questionable
activities although there are others that do provide valuable advice, education and assistance to those seeking credit help and want to better manage their debt. State and federal statutes regulating credit-counseling agencies often do not apply to Section 501(c) (3) tax-exempt organizations. As such some credit help services, like credit counseling organizations using questionable practices, may seek tax-exempt status to circumvent state and federal consumer protection laws. This is a matter of great concern to federal and state regulators as some credit help services use the tax code to by-pass consumer-protection laws. The IRS with the help of other federal agencies and state regulators, work to protect the integrity of the tax law to ensure that tax-exempt organizations understand and comply with the rules and to fight the growing abuse in this area. The credit counseling groups exploiting gaps in the law are not being fair to taxpayers struggling with financial problems. Some state laws require a non-profit status as a condition for doing business in the state and as such some credit help agencies seek this status. There are, however, other cases where non-profit status allows agencies to escape the reach of consumer protection laws. There are many laws, such as federal and state credit repair laws and many state credit-counseling laws that specifically exempt non-profit organizations. Non-profit status is sometimes used as a marketing tool by some credit help providing services that use the non-profit label as a mark of credibility and promote their above-board image. Some of them also typify themselves as charitable in 990 tax forms and other promotional materials. They claim to serve the society through education, though they charge for this or merely provide videos and CD ROMs, without any personal counseling. Some of them characterize their fees as donations. Most of these schemes are mere masks, disguising what is in reality a business arrangement between creditors and agencies. As consumers are paying fees for services, these should not be classified as charitable contributions. Beware of quick-fix solutions offered by some organizations! Consumers who are already feeling the crunch of money would do well not to waste any more money with deceptive credit counseling practices by following these tips: 1) Check whether your finances will be better managed with the help of the credit help organization through counseling and education. 2) Check carefully all that is written in the agreement that a credit counseling organization offers. The services to be performed by them should be enumerated in detail, such as: the payment terms for these services, including their total cost; how long it will take to achieve results; any guarantees offered; and the organization's business name and address. 3) High fees, voluntary contributions, and high monthly service charges, which some credit help agencies demand, may add to your debt and defeat your efforts to pay your bills. Promises made by some agencies that they can get negative information, such as bankruptcy, removed from your credit report and that they can help you get out of debt easily are warning signals for you. 4) Check with state agencies and your local business bureau about the credit counseling organization's record and whether creditors will be willing to work with them. Moreover, follow up regularly with your creditors whether your debt is being paid off. Choose the right credit help agency that will help in reducing your debt and not add to it. |
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