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For many years now, people facing debt related problems have approached debt consolidation agencies and credit counseling companies to help them get out of their debt trap. Though most of them are clean and above board service providers, there are a number of them who murky the waters and give a bad name to all such service providers. The Internal Revenue Service (IRS) has revoked the tax-exempt status of a number of such agencies due to scams perpetuated by them.

Considering the spread of bad debts all around ' with more than 80 percent of the Americans in debt ' people still need the services of good debt consolidation and credit counseling services. These services help them consolidate their various debts, arrange to give them good counseling on credit and debts, and ways to manage their finances. Such services will be ready to answer a few questions about themselves, and you need to ask them:

' How long has your company been in business?

' Are you ready to give the background of your company's credit counseling and debt consolidation management team? (Look to see what kind of relevant education and experience do the members have. Check if the Credit Counselors have Consumer Credit Counselor certification.)

' Does your company receive consideration in any form from the creditors? (Consideration in any form could be an incentive to push the debtors into a Debt Management Plan ' DMP ' that involves repaying as much of their debt, plus interest, as possible.)

' Do you actually provide free advice on credit, and any other consultations, or do you straight away advise DMP?

' Is your agency a member of the Better Business Bureau (BBB)? (A member of BBB responds to complaints and is ready for scrutiny.)

' Is your Credit Counseling agency licensed and bonded? (As they handle your money, it is necessary in case your money is mishandled.)

You need to be cautious when approaching companies for debt consolidation and credit counseling.