IRS Revokes Nonprofit Status of 41 Credit Counseling Agencies
The IRS may be good for something. BusinessWeek reported yesterday that the IRS has revoked the tax-exempt status of 41 “nonprofit” credit counseling agencies.
You have heard their ads, and if you are wrestling with debt, perhaps you have considered calling them. But many of these credit counseling organizations are nothing more than unscrupulous hucksters willing to prey off of debtors’ desperation. How?
Most will make lofty promises of negotiating lower interest rates and reduced monthly payments with your creditors in exchange for an initial and/or monthly “donation”. The organization will then collect one monthly payment from you and distribute it amongst your creditors. The organizations provide little, if any, actual counseling or education, and most of what they accomplish you can do for yourself.
Debtors may even suffer further at the hands of these scammers in the form of ruined credit. Negotiated repayment amounts may appear as charge-offs on your credit score, and because you cede control of your payments to the organization, many may be late.
There are plenty of resources online to help yourself out of debt, but if you do feel like you need individual attention, there are legitimate credit counselors out there. To find one visit the National Foundation for Credit Counseling.
Related Posts
- Credit Card Companies Extend Relief to Debtors in Debt Management Plans
- Credit Card Delinquencies Rising: How To Avoid Falling Behind
- 10 Things You Should Know About Debt Management Programs
- Does Debt Settlement Work?
What's Next?
Reading this site, you're already ahead of most people when it comes to your finances. Why not keep going? Help secure your financial future. Take action today:
- Get help with your debts
- Check your credit report and score, free
- Open a savings account
- Open an individual retirement account (IRA)
- Budget with Quicken
Join the Conversation!
What's your take on this story? Have a related question or comment? Share it now in a comment:
I'm David, a 20-something ex-financial journalist with a mission: To help you learn about personal finance, take control of your money, and get on with life! More...Take Charge of Your Finances!
Get e-mail updates and a free report: "10 Ways To Improve Your Finances RIGHT NOW". Guaranteed Spam-free. Check it out:
Ask Money Under 30
- Can I claim the $8,000 first-time home buyer tax credit if my name was on the deed, but not the mortgage?
- I’m a 21-year old college student; should I get a credit card to help pay for car repairs?
- Can I use student loan funds to consolidate credit card debt at a lower rate?
- Where should I store a windfall for a few months until I decide how to invest?
- Should I save for retirement or pay down my student loans faster?
Recent Comments