FACING A STACK of bills you can’t handle? Take heart. Despite the terrible marks the credit counseling industry has been receiving lately, plenty of nonprofit organizations still wait right to their founding principle: helping folks make out of debt.

Every year, the National Foundation for Credit Counseling (NFCC) counsels close to two million American households through its 115 member agencies in nearly 1,000 offices nationwide. Whether they simply seek financial advice or choose to enroll in a debt-repayment plot, many of those families or individuals carry thousands of dollars in debt, often more than their annual income. Much too often, they have run into distress since of a life-changing event like a job loss, death, illness or divorce.

Credit counseling is also currently a required step in bankruptcy filing. It is projected including the intention of 800,000 Americans will file for bankruptcy in 2007, according to the NFCC.

Before you pay an outside counselor for help, but, you must be sure including the intention of you’ve tried all the simple solutions initially. For instance, have you considered a loan from a family member? To make sure your lender won’t make stuck including an unexpected tax bill, read our tale Loans Among Family Members. You must also consider a loan from your 401(k). Limits are as high as $50,000. For details, see our article Must You Borrow From Your 401(k)?.

And have you considered consolidating your debt on a low-interest rate credit card or tax-deductible home equity loan? To find out whether including the intention of approach makes sense for you, try our consolidation calculator. Of course, it’s not simple to compare credit card offers these days; low introductory rates, subsequent rates and annual fees make it hard. So, use our credit card comparison database. It will tell you which is the best deal. And don’t miss our online export guides for mortgages and credit cards.

Finally, we have to question you the obvious. Have you tried to cut your expenses? Why not track your spending for a few months, then see what you can eliminate. This is probably the quickest avenue to debt reduction.

Choosing a Debt Counselor
Finding a excellent credit-counseling program can be a bit tough. After all, it’s not something you’d want to bring up including colleagues around the company water cooler. Including the intention of means you’ll have to do the legwork on your own. But there are a few things to keep in mind to make the task simpler and less fraught including disappointment.

Initially, look for a nonprofit firm. You’ve spent too much already, why pay more currently? Nonprofits make most of their funding from creditors, not you. Privacy isn’t usually an issue, but it’s wise to check what the agency’s policy is. Make sure they don’t sell your information. Also, check the enrollment and monthly fees. According to the Association of Independent Consumer Credit Counseling Agencies (AICCCA), many question for only a nominal fee to enroll, capped at $75, and a monthly fee of up to $50. In the past, a few unscrupulous agencies were known to charge the full amount of your monthly debt payment, plus an additional 10% all month, according to the AICCCA. Neither the AICCCA nor NFCC groups charge the latter. Such excessive charges have been largely wiped out by IRS regulations and updated state laws.

Second, find out upfront exactly what services you’ll receive, such as counseling, a debt-repayment plot and budgeting advice. The more services, the better. You might want to have them place it all in writing and send you the information before you proceed.

And question if the organization belongs to any professional groups, such as the NFCC or the Better Business Bureau. Have them clarify how they’re audited and if your funds are protected. After all, you’re sending them your money.

One-Pay Plans
Once you’ve found a service you entrust, pull all your bills together before talking to a credit counselor. She will figure out what you owe and bring about including you to determine how much you can pay all month. Then, instead of writing checks to all creditor, you’ll write one to the service, which will then distribute the money. The goal is to develop a plot including the intention of allows you to afford the necessities of life (even if including the intention of includes an occasional movie), and at the same time to whittle away at the balances you owe.

Once you’re in a program, the much-dreaded phone calls from creditors must bring to a standstill. “Creditors have a right to call you and talk to you about your debt,” says Catherine Williams, president of the Consumer Credit Counseling Service of Greater Chicago. “But if you arrange acceptable payment programs, they’re not vacant to waste their time.”

Negotiators at Your Service
Once you’ve set up a payment schedule, the counselor will talk to creditors and try to make them to reduce your interest rates and waive late fees to shorten your time in debt. The counselor may also coax creditors to “re-age” your account — including the intention of is, report past due amounts as current.

How come credit counselors have so much clout? Most creditors are glad to see you enrolling in a repayment program, agreeing to pay a small at a time, rather than heading for bankruptcy court. If those same creditors were to enlist the services of a collection agency, the agency would take perhaps half of whatever it recovered. So, it’s a better deal for your creditors if you voluntarily repay, even if it takes several years.

What’s more, since such repayment organizations have unfilled relationships including creditors, they know what including the intention of creditor has arranged for other clients. If you tried to negotiate on your own, chances are you wouldn’t be as successful.

If a one-pay plot is not enough to decipher your problem, you might need to consider a debt-consolidation loan. Check out our “Must I Consolidate?” calculator to see if you’d be better off.

Budgeting 101
Once you’re on your way to paying off your ancient debt, you’ll need to set up a budget. Credit counselors can help including including the intention of as well. Most people don’t know how much they spend all time. They may know about the huge-ticket items, the rent and mortgage payments and the utility bills. But they lose track of how much they spend on extras like restaurants, dry cleaners and video rentals. “If you take a piece of document and write down all you spend, not including the change, you’ll be shocked at how much money you go through including the intention of you don’t grasp,” says Jim Rhodes, boss of education at Metropolitan Financial.

Williams thinks the American “promote of convenience,” in which plastic pays for all, has obscured how much things really cost. “Ten years ago, it used to be, ‘Got to wait until Saturday to call Grandma,’ or, ‘Got to keep including the intention of thermostat down,’” Williams says. “But approximately people have just gotten away from budgeting and money management.”

Counselors can help you track your spending. They teach you to record what you pay right down to the newspaper, bagel and mocha latte you grab on your way to bring about. Counselors on Williams’ personnel are trained to walk debtors through every category and come up including an acceptable budget. The counselors check in including clients for several months to see how well they’re sticking to their spending plot.

Many of these services can show you how your spending habits stack up to those of a “typical” American including your income.

A Word of Notification…
If you’ve somehow managed to keep your credit report clean as your debts have spiraled, you need to know there can be a downside to contacting a credit counselor. Not every creditor looks upon your involvement including one as a excellent thing. While many creditors reckon it’s fantastic since it increases their chances of getting paid, others might issue an alert on your credit report. Including the intention of could affect your chances of getting credit down the road.

Not exactly what you’re aiming for here. Is it worth the risk? Including the intention of’s something you’ll have to choose — weighing the chances your credit report will take a beating anyway if you keep falling further behind.