This is an important question, as credit counseling is not for everyone. Often, it is simply a matter of budgeting your money better. Moreover, although credit counseling agencies are non-profits for tax purposes, they often make enough money to be profitable if they were a for- profit agency. Be very leery of excessive fees, or claims that a credit agency can fix all of your problems. If it sounds too good to be true, in all likelihood it is. For instance, a credit counseling agency CANNOT erase a bankruptcy from your credit record. At best, they can help to rehabilitate your credit score over an extended period of time by helping you make payments on time.
Nevertheless, with all the additional upfront and monthly fees added, many consumers are better off filing bankruptcy, as credit counseling can simply postpone the debt. You could end up spending months or years trying to pay down a debt that simply will not go away, even with credit counseling. Most importantly, if you do choose to try credit counseling, make sure you use a reputable credit counselor, and do not fall for “too good to be true” claims by counseling agencies. Also, just because an agency is “non-profit” does not mean that it won’t, or can’t rip you off.