Too deep in debt? Where to turn for help

NEW YORK (CNNMoney.com) -- Here's a staggering number: American consumers owe nearly two-and-a-half trillion dollars.

A lot of people turn to credit counselors for help but the Federal Trade Commission says some of them are misleading consumers about who they are and how much they charge. Here's how to find a counselor who will help you - not help themselves to your wallet.

Good counselors will advise you in managing your money, offer solutions to your current financial problems, and help you develop a plan to get and stay out of debt.

To find a reputable one, go to the the Department of Justice's Web site at http://www.justice.gov/ and search for their list of approved Credit Counseling Agencies.

To narrow down your choices, call your state attorney general and the Better Business Bureau to ask about individual firms. And you may think that just because a company is non-profit, it has a squeaky-clean reputation.

Not so. You need to do your research for each and every agency.

Avoid agencies that have only been in business for a short period of time. If the counselor gets a commission for putting you on a particular plan, walk away. You're better off with an agency that charges you a flat fee for its services and those fees shouldn't be significantly higher than $75 for signing up and $50 monthly for managing the program.

Also, ask whether the firm has financial ties to creditors. If they do, steer clear. Some are actually sponsored by credit card companies.

Many agencies push debt management plans in which they serve as an intermediary, taking in your payments and dispersing them to your creditors. This option is great if you have severe debt problems and are constantly hounded by creditors.

If not, you may be better off simply getting some solid financial advice. It's cheaper and you'll be in charge of your own situation. If you do opt for a debt management plan, make sure to get all the details in writing.

No matter which route you take to pay off your debt, make sure there are no gaps in your payments. Ultimately, you will be responsible for your debt.

So, if you're using a counselor, check up on their work. And stick with your plan for the long-run. Promise yourself that you'll never get into this kind of debt again.

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