Credit counseling is needed by all those individuals whose monthly expenditure is higher than their income. Most of these individuals use credit cards with abandon but don't know what to do when the monthly statements arrive.

Credit counseling companies can be of great help to such people as they help them to control and eliminate their debts. Such a company cannot help, however, if a person continues to spend without control. The base of any such advice has to be economic restraint. Persons with the tendency to spend uncontrollably need to learn restraint.

How can you know when it is time to turn to a credit counseling company? You may consider the following:

- When they can't pay the minimums on their credit cards

- When they are consistently late in paying one or more of their regular bills

_ if collection companies start to knock your door down

_ if creditors are unwilling to offer you any more help.

If any of these indicators are true in your case, you are in a dangerous spot. Even so, the decision of which company to choose should not be taken lightly. It is a serious decision as there are many unscrupulous persons looking to take advantage of you. You should make sure that any company you are looking to work with is registered with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

If a company requires a lot of money up front, you should be cautious. It is also imperative that you make sure the money you are paying to the firm is actually going towards resolving your debt. There have been instances in which such companies have either paid bills late for their customers or not even done so at all.

If a company makes claims that appear to be too good to be true, beware. There is no magical way to resolve all of your debts. Legitimate companies will not make everything appear to be a walk in the park. They will be honest with their clients as to the results of looking for lower interest rates at which to pay back their debt.

The most important thing to do is to avoid bankruptcy. Bankruptcy will show up on your credit score for more than ten years. That is why it is important to be careful as to the plan that a company presents to you. You are better off having a lower credit score if you can stay away from bankruptcy.

Many creditors will be very happy to find out that you are seeking counseling. They see it as a very positive move towards the goal of clearing yourself of your debts.