Credit counseling business "Booming"

From a recent Iconocast* news feed comes the report that one business that's taken off like a rocket with Baby Boomers in this recession is credit counseling. The National Foundation of Credit Counseling says that calls to credit counselors are up 30% this year, and the month of October saw a 70% spike over last year (Blogs.WSJ.com/wallet 11.21.08).

The NFCC, representing the nation's non-profit counseling agencies, says demand is being met by hiring more certified counselors. There are now 2,600 credit counselors (a 10% increase) and 1,600 housing counselors (a 25% increase). Credit counselors can help troubled consumers make a plan to manage debt, pay bills, save money and get their finances in order. The service usually costs around $20, and it's often waived for clients who are too strapped for cash.

Consumers are hurting and frightened, and they're reaching out for assistance and education. Because they're often reluctant to seek help until things become dire, the uptick in counseling is a sure sign that things are ugly indeed. Desperate consumers are mobilizing and seeking help.

As a Realtor® I am having to advise clients moiré often these days to seek credit counseling. I generally advise them to go to one of the non-profit counseling services, like Green Path, which has many offices here in Michigan or Money Management International, which is more of an Internet source of help. I’m not a credit counselor, so I can’t help with situations that don’t involve selling your house. If a short sale of your house is part of what makes sense to do, then I can help.

Hopefully you’ve had some money management help and advice for some time, in the form of a financial advisor. I’ve had a financial advisor for over 20 years and her advice and help have certainly helped me survive through many hard times. Sure my investments are down right now, just like everyone else’s, but I feel confident that she has me well positioned to ride out this recession and go on towards retirement. However, even she is not what I might need if I were in a really bad situation. She is more of an investment advisor and not a credit/debt counselor. That is a very specialized field, made up of people who are used to figuring out ways to manage really bad situations and skilled at helping negotiate payment programs with debtors.

So the advice here is to seek out the professionals at the companies listed above or at other local credit counseling companies, for help if you are in over your head. Just be cautious if you are going to deal with a for profit credit counseling company, especially any company that asks you for a front end payment to help you work out your problems. This industry, like so many others in the financial world, is full of slick operators, who are out to shake you down for whatever little bit you may have left. Do you homework and check out the company before you pay them to do anything,

* - Iconocast is a cultural tracking news service that focuses upon trends within the various cultural groups that they have identified, from the youngest “Millennial” generation thru the generation of “Baby Boomers.”