They are on television everyday. Looking professional and sympathetic, debt consolidation “counselors” offer to help anyone on shaky financial ground “eliminate debt,” and “lower monthly payments.” Just call the number on the screen and one of these highly-trained professionals will eagerly guide you to financial freedom. Sounds good, right? After all, counselors are supposed to help people. Before you pick up the phone, be warned that not all debt consolidators are reputable. Knowing how to spot disreputable debt consolidation firms can help you cut through slick advertisements to determine if your debt consolidation firm is really working for your best interest.

Good Signs

Understanding what a reputable debt consolidator does is key to spotting a disreputable debt consolidator. Before we even start discussing bad debt consolidators, let’s list what good consolidators do. Reputable debt consolidators:

* Sit down with you to understand what is wrong with your budget—and work out a manageable plan with you.
* Work with your creditors to lower interest rates to help you pay your debts off more quickly.
* Will charge a modest fee to work with you—even if they are non-profit.
* May require that you close all credit accounts as a condition of consolidation.
* Will collect a monthly amount from you, disbursing your payment to different creditors.
* Clearly answer any questions you have to ensure that you completely understand where your money is going—and where it went.
* Are certified with the Association of Independent Consumer Credit Counseling Agencies or the National foundation of Credit Counseling. Don’t be afraid to call these agencies—and the Better Business Bureau—to confirm that your consolidator is registered in good standing.

Warning Signs

Okay, so you know what a reputable debt consolidator should do. But let’s face it, in today’s world, illegitimate debt consolidators are likely to say whatever it is necessary to placate you—and lull you into complacence. Don’t be lulled. Be informed. Disreputable debt consolidators:

* May tout their non-profit status as a way of earning your trust.
* Will make promises that seem to good to be true. Did your counselor promise to cut your debt in half or cut your monthly payments by 75%? Try a second opinion.
* Might try to hide high fees and handling costs in the fine print—all while maintaining that they have no fees.
* Try to “talk around” giving answers, leaving you feeling confused. If your counselor won’t clearly explain what is going on, find another one.
* Often have many certifications framed on the wall. Remember that it is your responsibility to check out your firm. Appearances can be deceiving.
* Instill a sense of urgency, causing customers to make hasty decisions.

Are you still interested in debt consolidation? Go ahead, pick up the phone and call the number on the screen. Just remember that knowing how to spot a disreputable debt consolidation firm is the only way to protect yourself—and your money.