One of the best resources you have in debt consolidation is a credit counselor. However, not everyone who calls himself a credit counselor (or financial advisor or other title) is really going to be able to help you. Some won’t know what they’re talking about. A few are going to stick you with outrageous hidden fees. Some are total frauds. And some are true experts who will work with you to get you out of a financial predicament. So how do you sort out the pros from the quacks?

There is an organization called the National Foundation for Credit Counseling. You can find them online (nfcc.org). The NFCC certifies credit counselors. You can use their website to find a certified credit counselor near you. (The website is easy to navigate and there is a place where you can type in your zip code and see who's nearby.)

Certification means the counselors meet certain minimum standards and have been screened. You’re not going to get hoodwinked with these guys. At the same time, a credit counselor is like any type of counselor. You need sometime you can relate to, somebody you feel comfortable with. So seek out a certified credit counselor but don’t be afraid to call a couple before you decide on who you would most like to work with.

A good counselor is going to work with you to do a few things. Your counselor will evaluate your overall financial situation and help you understand your debts and get rid of unnecessary debts. The counselor will also work with you to develop a reasonable budget to facilitate paying down your debts. Last but not least, the counselor will be able to explain to you different debt consolidation options that may work for you.

Not everyone is a candidate for debt consolidation. A certified credit counselor is a great start in terms of helping you understand what debt consolidation might be able to do (or might not be able to do) in your particular situation.

Sometimes a certified credit counselor will advise you to do something other than debt consolidation. One thing that sometimes comes up in extreme situations is the Debt Management Plan or DMP. This is an extreme step, and certified credit counselors will only recommend it in specific cases. Another extreme plan is debt negotiation. While a certified credit counselor may recommend either of these, they are unusual first steps.

There are some things to be wary of when working with a credit counselor. The first is any credit counselor that seems to be steering you uncomfortably fast toward a DMP or debt negotiation plan. These damage your credit. This is not to say that they are bad or don’t have their place, but they are not things to be undertaken lightly.

While most credit counselors charge for their services, you should not have to pay a high fee or a monthly fee. Be careful if you’re asked to pay a whole lot for counseling.

If you’re asked to check out a DMP, do not enroll on the spot or sign up before you get full information. Sometimes you’re told to enroll first and then the information will follow. Don’t buy that! You should be able to get full information without signing up. You wouldn't take out a loan without knowing the terms. Don't enroll in a debt management plan without knowing what it's all about.

Fortunately, there are lots of excellent credit counselors available to help you, probably not even very far from where you live.

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