Consumer Financial
Protection Bureau
Learn more at consumernance.gov 1 of 2
Planning to become debt-free?
Many people get into debt because
they can’t afford to make monthly
debt payments on top of their daily
living expenses. You’re not alone,
and trustworthy help is available.
Consider working with a
credit counselor
A credit counselor can help you explore ways to take
care of your debt. Credit counseling organizations
advise you on managing your money and debts and
may help you develop a budget. They’re usually
nonprot organizations and you can nd them in
the phone book or on the Internet. To get started,
you can try the Financial Counseling Association of
America, at www.fcaa.org or (800) 450-1794, and
the National Foundation for Credit Counseling, at
www.nfcc.org or (800) 388-2227. Then check on
the organization with the Better Business Bureau
or your state’s attorney general or consumer
protection agency.
The counselor may:
§ Offer free educational materials and workshops
§ Review your budget and come up with plan to
address your money problems
§ Help you decide which debts to pay rst
and understand what can happen if you stop
making payments
§ Make an upfront agreement with your creditors
to stop collections and not charge you late
fees while you are in a credit counseling debt
management program
A debt management plan
helps you control payments
and costs
A credit counselor can help you come up with
a debt management plan for all your debts.
You may make one payment to the credit counseling
organization each month or pay period, to use
toward payments to your creditors.
Credit counselors usually don’t try to reduce what
you owe. But they may lower your payments by
having you make payments over a longer period,
or they may get your creditors to lower your
interest rate.
A debt settlement plan can cost
more and hurt your credit
Debt settlement companies are different from
nonprot credit counseling organizations.
The companies often claim they can make a deal
with your creditors to reduce the amount you owe.
They often charge upfront fees, which may be illegal.
Learn more at consumernance.gov 2 of 2
Consumer Financial
Protection Bureau
Dealing with debt settlement companies can be risky.
You may end up more in debt than when you started.
That’s because most debt settlement companies:
§ Tell you to stop paying your debts
§ Tell you they will negotiate with your creditors
and give you time to collect the money you need
to pay the settlement
What they might not tell you is that not paying
debts while trying to settle them can:
§ Lower your credit score
§ Lead creditors or debt collectors to le lawsuits
against you
§ Add late fees and interest to your account,
so you owe more
Unless the debt settlement company settles all
or most of your debts, the penalties and fees on
the unsettled debts may wipe out any savings the
debt settlement company achieves. Not paying
your debts can also hurt your credit score and your
ability to get credit in the future.
Warning signs of debt
settlement scams
Think twice about any debt settlement
company that:
§ Charges you a fee before it reduces
your debt
§ Promises to make your debt go away
§ Tells you to stop talking to the companies
you owe money to
§ Tells you to stop paying your debts
§ Tells you it can stop calls from collectors
§ Tells you it can stop lawsuits led
against you
§ Promises your debts can be paid off
§ Says it’s going to use a “government
program” to pay your bills
§ Tries to enroll you in a debt relief program
without going over your budget rst
§ Won’t send you information about the
program unless you share personal
nancial information
Submit a complaint
Have an issue with a nancial product or
service? We’ll forward your complaint to the
company and work to get you a response —
generally within 15 days.
Online
consumernance.gov/complaint
By phone (180+ languages)
M-F, 8 a.m. - 8 p.m. ET
(855) 411-CFPB (2372)
(855) 729-CFPB (2372) TTY/TDD
By mail
P.O. Box 2900
Clinton, IA 52733-2900
By fax
(855) 237-2392
4/2019
