Credit Counseling Through Employers

Employers do not directly counsel employees who are having debt management problems, but they often help workers find appropriate credit counseling assistance. Many non-profit credit counseling companies help you get a handle on your debt for free or at affordable rates, but some charge excessive fees or try to push you into inappropriate programs, the Federal Trade Commission warns. Employers make referrals to legitimate counselors.

Referrals

Start with your company's human resources department for a credit counseling referral. The department may be able to provide this information or refer you to another source, like an Employee Assistance Program. EAPs help with various personal problems, including debt management. Credit unions often provide credit counseling or referrals to legitimate firms, according to the New Jersey Division of Consumer Affairs, so this may be a good source if your employer has an affiliated credit union.

Confirmation

Do not automatically assume that a credit counseling firm is legitimate just because you got a referral from your employer or the company's credit union. Ask if it is licensed and affiliated with professional groups like the National Foundation for Credit Counseling, and inquire about its funding sources, the Better Business Bureau advises. Nonprofit firms should get the majority of their income from creditor contributions, not counseling clients. Request an up-front fee disclosure and confirm that the counseling company provides written contracts.

Results

You may find a credit counselor through your employer's assistance program or credit union, but you are responsible for following through. The results depend on your financial situation and resources. The counselor may help you create a new budget that is enough to get things under control or refer you to money management classes. You may need structured assistance, like a debt management plan that requires monthly payments and erases your debt within five years if you make all the payments on schedule. Your counselor can often get help from your creditors, like better interest rates and late payment fee forgiveness, as part of the plan.

Considerations

Your employer never has to know that you are going through credit counseling if you want to keep it to yourself. EAPs provide confidential assistance, so you can contact your company's EAP provider and get a credit counseling referral without disclosing it to anyone else if you wish. Your employer will not know if you get into a debt management program through a credit counselor because you set up the payment arrangements directly between you and the counseling firm.