You may be wondering why an indebted consumer would even bother to consider enlisting the services of a for-profit debt relief company when non-profit debt relief companies exist. While this question seems to cut right to the heart of the matter, the surprising truth is that the profit status of a debt relief company should be of secondary importance in determining your ultimate choice.
Why is this the case? Because non-profit companies represent a specific type of debt relief solution and not a choice between different solutions. And since everyone’s debt problems are different and unique, the severity of the debt crisis is what determines which debt solution (and hence which type of company) should be considered. The profit status of the debt relief company chosen becomes a much lesser consideration. The most important factor in choosing the proper debt relief option is how suitable and effective the solution is.
To clarify the point, you need to understand that all the non-profit debt relief companies we are referring to are debt management companies (a.k.a. consumer credit counseling companies). And debt management companies are only one of five possible debt solutions available to the consumer. So the a priori choice of a non-profit company is a case of “putting the cart before the horse”. By choosing in favor of the non-profit, you are limiting yourself by blindly choosing only one of five possible debt relief solutions.
What are the five credit card debt relief solutions from which to choose? In ascending numerical order of the severity of the debt problem, the choices are:
- Discipline and Thrift
- Debt Consolidation
- Debt Management or Credit Counseling
- Debt Settlement
Now that you’re beginning to see the big picture, it should be clear that your most important task is deciding which of the above five debt relief solutions is right for you. Only if that choice happens to be debt management will the issue of profit status enter the picture. However since only debt management companies are non-profit companies, it is a moot point and contributes nothing toward narrowing your company choices any further.
You may also be interested in why it is that some debt management companies are non-profit. The reason is that they are required to provide free counseling and education services as well as put a cap on the fees that they can charge for their programs. Being organizations that are exempt from normal corporate income taxes, they fall under the regulation of the IRS.
Just one final note that bears mentioning: the non-profit status of debt management companies does not mean that their programs are free.