What is a Credit Counseling Service?
One need only peruse any metropolitan telephone directory to discover the wide spectrum of organizations that advertise credit counseling services. Credit counseling services are available from nonprofit organizations, for-profit organizations, schools, churches, legal-aid organizations, and attorneys, among other providers. HR. 833 does not define “credit counseling service.” For purposes of this article, “credit counseling service” means an organization that exists and functions to serve its consumer debtor clients and their creditors by attempting to resolve debts through the formulation of individual debt repayment plans. The credit counseling service seeks, when possible, reduction of the amount of debt and reduction or elimination of fees and charges accrued on the debtor’s accounts. The debt repayment plan provides for payment to creditors over a period of time during which creditors withhold enforcement of their claims. Generally, clients are expected to stop using their credit
