So Many Debt Relief Solutions, So Little Time Consumers that have taken the time to learn about their debt settlement or relief options have probably come across dozens of different agencies and services that feature 'non-profit' relief of some kind.
Since the 50s when credit counseling became such a popular industry, there has always been a large domination by the non-profit companies.
There are many different reasons that these companies are so popular, and each one offers a glimpse into what many credit counseling services are really like.
-- Many credit counseling services are funded by creditors.
In order to receive this funding, companies have to be established or intent on being non-profit organizations.
The funding that they get is known as 'fair share' funding, and will be a small part of the payments that are made to creditors on behalf of the clients of the counseling agency.
-- Tax exempt.
Enough said.
If a company is non-profit, they don't have to pay taxes.
The IRS and state governments around the country automatically give special tax breaks to companies that are non-profit, and some of the funding that they get from public and private grants requires the non-profit status, as well.
-- Consumer protection laws often mandate that companies have to be non-profit when it comes to credit counseling.
The fear is that companies that are for-profit will not do what is in the best interest of the consumer.
However, there are many non-profits that aren't doing this, either, but that's a different article.
-- Education is the primary goal of many credit counseling organizations.
They are able to file non-profit status because they educate the public as their main area of focus.
It would be slightly foolish to not file as tax-exempt and non-profit when giving out free public education and information.
-- Telemarketing rules don't apply.
There are still guidelines out there, but non-profits have fewer restrictions than traditional telemarketing companies or for-profit services might.
Even if it is only a small number, there are going to be companies that are in business for this reason alone.
Regardless of what you see or read in advertisements and commercials, many non-profits are only organized that way to benefit the interests of the company and the people invested in the company.
There ARE many credible counseling services out there that focus on education and deserve their non-profit status.
However, the IRS has also found many in recent years that are less than honest about their non-profit status and the abuse of that power.
Therefore, you should always take the time to check out all the different companies that you find and ensure that you find a reputable company to work with.