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My Credit Counselor Was Awful. What Now?

 
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November 9, 2012
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QDear Erica,

You have said many times that you used to be a credit counselor and that you suggest people in debt go to one. Well, I did, and it was horrible. They didn’t do anything at all for me. I wasted the entire hour. Please tell people the truth about credit counselors. They are shams. – Samuel

A
Hi Samuel,

I’m so sorry that you had such a disappointing credit counseling agency experience! It’s true that I recommend credit counselors for people who are struggling to meet their expenses while also trying to pay their unsecured debts. Most of these nonprofit organizations really are fantastic, and the people who work for them are often dedicated and helpful.Ask Erica

The mission of a credit counseling agency is to help people with money troubles get back on the right financial track. Their certified counselors are trained to identify what led to the client’s problems and ask about their hopes from the counseling session. After that, the counselor will delve into the client’s numbers — essentially, their assets, income, expenses and debt. At the end of the appointment, the credit counselor will present an action plan based on the client’s needs and desires that includes at least three different options for resolution. These are all mandatory steps that the counselor must take as it’s part of the agency’s accreditation process.

So what could have happened that left you so unsatisfied? My guess is that either:

1..You got stuck with a bum counselor. Some of these professionals are better than others and maybe you were assigned someone who was having an off day or was burned out on the job. It’s common for counselors to see five to seven clients in an eight-hour period. If you were the last in line, you might not have had the best service. Or maybe the employee just wasn’t very good to begin with. Not everyone is cut out to be a credit counselor. It requires great patience, creativity, kindness and objectivity — as well as considerable personal finance knowledge. It is possible that you were dealing with a dud.

Or…

2. You had unrealistic expectations. The other possibility is that you wanted a miracle to happen. I can’t tell you how many people I counseled who came in looking for someone to wipe away all their misery with a magic wand. But the harsh reality is that sometimes the answers are unpleasant or they take effort. If you don’t have the money to cover your liabilities — either by using the agency’s debt repayment program or on your own — the action plan can include learning how to behave during a lawsuit, how to deal with credit damage or how to file for bankruptcy. You might not want to hear any of these suggestions. Conversely, if you do get to use the agency’s plan, to do so, you may have to cut spending to the bare minimum for years, work longer hours or obtain a second job. Again, these may not be pleasant propositions and not what you wanted at all.

The solution now: If you did have a lackluster counselor and still would like help with your financial obligations as well as designing a better budget, go back to the agency and request someone else. Hey, that’s what they’re there for and it’s free, so what’s the harm? I think having a professional who is talented at developing personalized spending and savings plans while also giving guidance is terrific — even when the medicine is a little bitter. Just be sure to keep your expectations reasonable.

In the meantime, you may also want to go back to the original plan and reread it. Perhaps your counselor gave you some valuable suggestions that were worthwhile after all.

Got a question for Erica? Send her an email.


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