Across the country, consumers are collectively trillions of dollars in debt. It’s no wonder – times are difficult – and today, people are more likely to use their credit cards, even to pay for everyday living expenses.

In Maine, 63 percent of people surveyed admit they do not compare terms and information between banks when shopping for credit cards, according to a recent survey. This may leave many signing agreements with high interest rates and fees they cannot afford. In fact, 46 percent of Mainers can only manage to pay the monthly minimums on their outstanding credit card bills. This could be one reason why nearly 60 percent of people in Maine don’t have a “rainy day fund” set aside for financial emergencies.

If this sounds like you, credit counseling can be a way to crawl out from under the weight of too much debt. In fact, the law requires anyone considering bankruptcy to meet with a government-approved credit counseling agency to determine whether other options are more appropriate. Sometimes it’s just a matter of reorganizing your budget. In other cases, a debt management plan (DMP) is the best move. In that case, credit counselors can help by negotiating new terms or lower payments with your creditors. And in some cases, bankruptcy could be your best option.

To find a good credit counseling agency, you can start by visiting your state’s Bureau of Consumer Credit Protection where you’ll find helpful information on choosing a credit counselor as well the laws and rules that regulate how “credit service organizations” can do business in Maine. 

Credit Counseling Rules & Regulations

A few rules to know about credit counseling in Maine:

Registration and Bond Requirements

Credit counseling agencies must be registered with the state of Maine, possess a $10,000 bond and then re-register annually. This information must also appear on your written agreement, along with the procedural steps you would have to take, should you decide to use their services and later find it necessary to take action against the bond. Bonds protect your money. 

The Written Agreement

It is illegal for a credit counseling agency to ask you to sign any documents until you fully understand and agree to the terms, which must be in writing. Maine also requires that agencies include the following statement on all contracts: “NOTICE TO CONSUMER: Do not sign this agreement before you read it. You are entitled to a copy of this agreement.” Written agreements must also remain on file and immediately accessible in the State of Maine for at least two years after the credit counseling services are completed. 

Fees 

Don’t pay any fees upfront – nothing. Credit counselors are first tasked with helping you make the best decision for reducing your debt load. In order to determine the best course of action for you, an ethical credit counselor will first complete – usually free of charge – a full analysis of your debt situation. After that, he or she will suggest a plan you can live with and, only after you understand and agree to the plan, should the credit counselor impose fees. The National Foundation for Credit Counseling suggests paying no more than a one-time setup fee of $50 and then $25 monthly.