Have you considered using a "Non-profit" Credit Counseling program to help you get out of debt? Before you make that decision, you should be aware how these programs work.

When you go to a Credit Counseling agency for help, they will design a reorganization plan to pay your debts. The Consultant will take information on each of your accounts. They have predetermined figures from each creditor regarding the interest rate and the minimum payments the creditor will accept. Your plan will be based on these figures.

The interest rate your creditors will agree to can range from 12 to 20 percent, with a few creditors coming in even higher. Additionally, some creditors won't participate in reorganization plans at all, so you may be left paying some debts on your own.

If you are accepted into the program, all your accounts are closed. You will make a payment to the program each month and the counseling organization will disburse that payment to your creditors. Unfortunately, sometimes your creditors are not paid by the due date, and you still end up with late and over limit fees.

The creditors then pay the agency a "fair share" contribution based on how much is collected from you. In this sense, the counseling organizations are acting as collection agencies for your creditors! Actually, the largest of these agencies, the Consumer Credit Counseling Services or CCCS system was founded in 1972 with the sole purpose to recover debts and keep consumers from filing bankruptcy. Whose side do you think these Credit Counseling and Debt Consolidation organizations are on, yours or your creditors?

While you are on the program, your creditors will likely report to the credit bureaus that you are on a hardship program and have a 3rd party payer. This can be reported for up to seven years after you complete their plan, leaving a large black mark on your credit report. Actually, some lenders view a reorganization program in the same light as a Chapter 13 bankruptcy!

Also, don't be fooled by the term "non-profit", which makes it sound as if the company is a charitable organization working on your behalf. Although many Credit Counseling companies call themselves non-profit, this does not mean they are not trying to make money. The Consumer Credit Counseling industry is a billion-dollar industry. "Non-profit" simply means that at the end of the year they will not show a profit because they will have spent that money throughout the year by paying high wages to executives within the company. Or in some cases, independent "non-profit" companies work closely with a second company that actually collects the fees.

If you do decide that a credit counseling plan is right for you, do your research and make sure that the company you choose is credible. Many of these companies have bad track records and negative reports so if you choose this option make sure you do your due diligence.