Credit counseling teaches consumers how to stay out of crippling debt. In the United Kingdom, this is known more accurately as debt counseling.

Here's breaking news on credit counseling.

Here's the Wikipedia entry.

From the SPTimes.com:

6 Avoid credit-repair clinics. Their ads promise: "We can erase your bad credit, 100 percent guaranteed!" But such clinics, which are different from credit-counseling agencies, often charge hundreds or even thousands of dollars to do what you can do for free.

7 Tackle credit-card debt on your own. Transfer your card balances to a card with a lower interest rate, and concentrate on paying it off while those low rates last.

8 Get reputable help if you really need it. If you need a credit-counseling agency, get connected to one that has made a commitment to professional and ethical standards through the National Foundation for Credit Counseling (www.nfcc.org, 1-800-388-2227 and the Association of Independent Consumer Credit Counseling Agencies (www.aiccca.org, 1-866-703-8787).

9 Know what credit counseling should include. A good counselor will sit down with you and discuss your financial situation in detail, devise a tailor-made action plan and provide you with ongoing support. A substandard counselor simply will ask you to fill out an application.

10. Find a reputable financial planner. Find a fee-only financial planner through the National Association of Personal Financial Advisors (www.napfa.org) or the Financial Planning Association (www.fpanet.org). Fee-only planners do not make commissions by selling you certain financial products.

Laura T. Coffey (laura@tentips.org)

Sources: Financial Planning Association (www.fpanet.org); Consumer Reports (www.consumerreports.org); Federal Trade Commission (www.ftc.gov)

Here are some tips about credit counseling and the like from the USA Today:

Check your bank and credit card statements online. Once you find out how well you fared in sticking to your holiday budget — assuming you had one — you can either pat yourself on the back or move quickly to get rid of the debt. In the mayhem of holiday shopping, many people lose track of how much they've charged to their credit cards or withdrawn from their bank accounts. That partly explains why credit counselors typically see 40% more customers in January than in any other month, says Dave Jones of the Association of Independent Consumer Credit Counseling Agencies. This year, Jones expects "more (customers) than usual" because, despite the uncertain economy, "people are still pretty optimistic. We're going to see some high spending."

•Tackle debt.

If you've racked up debt, map out a plan to get rid of it as early in the new year as possible, even if that means temporarily taking on a second job or forgoing the Starbucks coffee each day. Enlist your family's help in brainstorming ways to trim expenses until you're back on sounder financial footing. You could watch television instead of going to the movies, return unwanted Christmas gifts or just start a new tradition of Sunday brunch at home instead of at the diner. For 101 other ways to cut small and big expenses, check out financial planner Sue Stevens' November column, entitled "Trim Expenses While You Trim the Tree," available under the personal-finance tab on Morningstar.com.

Here's a Dec. 26 report on credit counseling:

The Consumer Credit Counseling Service in Syracuse says people just don't realize how much they're actually spending when they use a credit card to pay for those holiday gifts. Studies show you spend 12 percent more than you would if you used cash. And the reality of what you actually spent never really hits until three weeks into January, when the bill comes. "The average spending this year was probably close to $1,000 and a lot of it put on credit cards," said Consumer Credit Counseling Services of Central New York Assistant Director of Community Relations Gary Thurber. "Once those bills start coming in and they add that balance to the balances they already have, those payments along with all the other expenses that go up this time of year, can push them over the edge."

So, where do they land? Credit card debt, with lots of late fees. The average $1,000 dollars can easily turn into $2,000 or even $3,000, if you aren't paying the whole bill off at once. The C.C.C.S. advises you pay off your credit card debt as soon as possible, before the numbers just keep piling up. And if you ever do get caught up, experts say there's an easy way to avoid the same problems next year. That would be putting money each month into a separate savings account designated for holiday spending.

From the South Florida Business Journal:

Putting a twist on a line from "The Sixth Sense," a T-shirt at Consolidated Credit Counseling Services says, "I see debt people." Unfortunately, they are seeing all too many these days. Howard Dvorkin, the founder of the Fort Lauderdale non-profit, has about 300 staffers but could use up to 100 more counselors with call volume up 80 percent this year. He has an MBA from the University of Miami and the perspective of a CPA who helped clean up after the savings and loan meltdown of the late 1980s and early 1990s.

"Nothing compares to what we are seeing," he says now. "What we are seeing now is a widespread financial meltdown and a lot of people are hurting and have no where to turn to. ... We're seeing a lot of people from a lot of different areas coming to us. Not only subprimes, but all walks of life."

Consolidated, which is 15 years old, is paid 2 percent of client's credit card debt by the card issuers to work with the holders and help them avoid bankruptcy.

A typical client is someone who has been walking a financial tightrope with debt built up over time, Dvorkin said. Then their situation changes, such as loss of a job. In past years, many consumers used their houses as piggy banks to pay down credit card debt via refinancings or home equity lines. Now, they have built up credit card debt once again, but there's no equity left to tap. Dvorkin said a report about six months ago showed consumers were defaulting on their mortgages before their credit cards.

From TulsaWorld:

Holiday spending and unexpected expenses related to the ice storm have left many feeling less than jolly. Margo Mitchell, president and CEO of Consumer Credit Counseling Service of Oklahoma, expects the agency will have a busier January than in the past because of the ice storm's effect. The group offers money management and credit ed ucation. People were forced to buy meals, flashlights, candles and other items they hadn't anticipated, Mitchell said. Then, as power came back on, they wanted to get in the Christmas spirit -- so they went holiday shopping. "I think their budgets will be impacted," she said. For those consumers who may have overspent this holiday, Mitchell provided some tips to help them regain their financial footing.

From the Fay Observer:

Despite a last-minute rush in the days before Christmas, consumer spending over the holiday season has, to this point, fallen far short of forecasts. Retailers are singing the blues. But the fact that consumers are showing restraint is good news. It means that after, years of relying on credit, people are resisting the seasonal push to buy more than they can afford. Unfortunately, the shift in behavior is years too late. Americans’ out-of-control borrowing has caught up with them. Weighted down with debt, consumers are falling behind on their credit card payments at an alarming rate. A recent Associated Press analysis of financial data from the country’s largest card issuers found delinquencies and defaults rose to double-digit percentages this year. Shaky real-estate markets are partially to blame. For years, rising house prices have fueled the economy. Low interest rates have encouraged many to buy bigger houses than they can afford. And instead of saving money for a rainy day, homeowners have banked on earning big returns from property sales. Rising interest rates and the subprime mortgage fiasco brought the reckless times to an end. As the number of borrowers falling behind on their mortgage payments climbed to the highest level in five years, home values have fallen and refinancing deals are harder to come by. For some, the inability to pay housing debt has exacerbated consumer debt. For others, the problem started with credit cards and seeped into mortgages. Either way, it’s clear that many have overextended themselves.

The Washington Post reports:

In the middle of his speech yesterday on the administration's efforts to fix the mortgage crisis, Treasury Secretary Henry M. Paulson Jr. paused to carefully spell out a toll-free telephone number that troubled homeowners can call for help. The hotline is not staffed by government officials or mortgage lenders. Rather, the calls are answered by consumer counselors from nonprofit groups, which are taking an increasingly high-profile role in helping borrowers with mortgage problems.

The groups are acting in some cases as a buffer between lenders and homeowners. Legislation is pending before Congress that would tap NeighborWorks America, a national nonprofit group, to distribute $200 million to local counseling centers. In October, the Neighborhood Assistance Corporation of America, often a vocal critic of mortgage lenders, signed a deal with Countrywide Financial, the nation's biggest mortgage lender, to help restructure loans for struggling Countrywide clients.

However the administration addresses the mortgage crisis, "they are going to need the nonprofit community," said Kenneth D. Wade, chief executive of NeighborWorks.

His group is training new housing counselors and plans to double its counseling staff by next month. "We think every consumer needs a mortgage adviser," he said.

Nonprofit organizations around the country are already seeing a soaring demand for their services. St. Ambrose Housing Aid Center in Baltimore, which usually sees about 700 families a year, says it has met with almost 2,000 so far this year.

From KDBC:

Irma Pinon, of Mission Valley, likes the finer things in life: clothes, cars, vacations. However, over the last decade she had to make some sacrifices. Pinon's family had fallen several thousand dollars in credit card dept. It's an all too common problem, especially around the holidays. "We're really susceptible to impulse buying around the Christmas holiday," said Maureen Hankins, director of Consumer Credit Counseling. "When you start using plastic you forget that it's money, that's a lone, you think that it's just money." Pinon had to pay $1,000 a month for seven years before she cleared her dept. "You know what I learned, you have to think with your head not your heart," said Pinon. Consumer Credit Counseling helped Pinon get her credit back on track by helping her consolidate all the bills into one lump sum and then coming up with a budget so that they'll be able to pay it off.

From the Los Angeles Times:

Carrying balances on your credit cards is a terrible idea. It encourages you to live beyond your means and leaves you vulnerable to sudden increases in your interest rates or minimum payments. You need to get on track. Can you cut expenses or land a second job that would enable you to pay these bills? If not, and you can't even pay the minimums, you should talk to two professionals: a counselor with a legitimate nonprofit credit counseling agency, preferably one affiliated with the National Foundation for Credit Counseling, and an experienced bankruptcy attorney.

Credit counselors' agreements with card companies allow them to offer repayment plans at lower interest rates. But the counselors could steer you away from bankruptcy, even if that might be the best option for you. Bankruptcy attorneys, by contrast, might be inclined to steer you to court. Consulting both will ensure you get a balanced picture of your options.

Trying to settle your debt for less than what you owe is fraught with peril:

* Debt settlement firms tend to charge high, often hidden fees and can offer no guarantees of success (if they do offer guarantees, that's a sign to steer clear).

* You're likely to do further damage to what's left of your credit scores.

* You may get sued. Although bankruptcy stops collection efforts, including lawsuits, there's nothing to stop your creditors from suing you in the midst of debt settlement negotiations.

* Then there's the tax issue. As you suggested, the "forgiven" debt may be taxed as income to you.

From SFGate.com:

The Consumer Credit Counseling Service of San Francisco is one of five nonprofit agencies around the country that staff the HOPE hot line - the free telephone assistance for struggling homeowners touted by President Bush on Thursday.

"I have a message for every homeowner worried about rising mortgage payments: The best you can do for your family is to call (the HOPE hot line)," Bush said in a televised speech, although he actually recited the number of a Christian school in Texas, instead of the correct number, (888) 995-4673.

The phones have been ringing nonstop since then, although there were already plenty of desperate people calling. As foreclosure filings nationwide have skyrocketed, the HOPE hot line has handled almost 100,000 calls this year.

The San Francisco office typically fields 400 to 600 calls a day; on Thursday, that jumped to 1,900, said Rick Harper, vice president and director of housing.

The calls make one thing clear: Many callers are grateful for someone who can explain basic facts about managing their cash flow, what to say to their lender and how the foreclosure process works. Some are in so far over their heads that there is only so much counselors can do to assist them. Some might be able to qualify for a workout plan in which their lender accepts smaller monthly payments, but even with the hot line's help, getting approval from swamped lenders can take weeks.

Here are some tips on credit counseling and the like:

  • Create a budget and a net worth statement. All things financial should start with these two documents. A budget lets you know where all your money is going. Your net worth statement gives you a snapshot of what you own and owe. To download both documents, go to http://media.washingtonpost.com/wp-srv/business/pdf/BudgetWorksheetPost.pdf and http://www.washingtonpost.com/wp-srv/business/pdf/networth.pdf.

  • If you have credit card or student loan debt, develop a plan to aggressively rid yourself of that burden. If you can't do it yourself, contact a consumer credit-counseling agency. To find one in your area, call the National Foundation for Credit Counseling at 800-388-2227, or visit http://www.debtadvice.org.

  • Get a will prepared or update the one you have. If you don't have the money to hire an attorney, then at the very least go to any office supply store or go online and order a no-frills will kit. Nolo.com sells basic wills online.

  • While you are gathering all the information for your will, prepare a "letter of instruction." This letter includes who should be contacted in the event of your death and the whereabouts of all your essential documents, such as your will, bank statements, insurance polices, checking accounts and mutual fund statements. If you write the letter on a computer, remember to print a copy or save it to a CD in case your computer can't be accessed.

  • If you haven't already, get copies of your credit reports from Equifax, Experian and TransUnion. Everyone is entitled to a copy of their credit report from each bureau every 12 months. For more information on the free reports, visit http://www.annualcreditreport.com. This is the only official Web site to get the free reports.

From thestreet.com:

Foreclosure-rescue scams usually revolve around heavily promoted deals supposedly designed to save the homes of people who have fallen behind on their mortgage payments and are facing foreclosure. The scam artists proclaim to "save your home" or "pay your mortgage," but in reality they only generate a quick profit for themselves while possibly stripping away the value of the home with no benefit to the owner. "Scam artists can evict a family from their own home and then sell it on the open market before the homeowner has any idea of what is going on," says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. Foreclosure-rescue scammers usually identify potential victims through public foreclosure notices in newspapers, via Internet listings, or from government offices that post foreclosures. The "rescuer," whose goal is to make a quick profit through fees or direct mortgage payments that are never passed on to the lender, often first contacts the homeowner by phone, personal visit, card or flyer left at the door, or other advertising means, say experts.

From DETnews.com about credit counseling:

"It's definitely about the bad economy and housing market," said Natasha Swoish, manager of bankruptcy counseling and education services at GreenPath Inc., a Farmington Hills-based credit counseling service. "Especially from the Detroit area, we're seeing a lot of people coming in because of foreclosure. It's a last-ditch effort to try and save their homes." Swoish said GreenPath's counselors work with those in debt to set up plans with creditors, rather than defaulting or seeking bankruptcy protection. But lately, she said, that option of last resort has become necessary for those out of work and swimming in debt.

From volunteer.tv:

Add that Holiday debt to an average household credit card debt of 9,900 dollars, and you'll remember this Christmas for years to come because that's how long it will take you to pay for it! "Pay more than the minimum payment because, if you pay just the minimum payment on a $4,000 dollar credit card with the limit, it takes a little over 20 years to pay that off," credit counselor Joe Garrison said. Consumer Credit Counseling Service manager Joe Garrison says the Holiday season is the perfect time to give yourself the gift of financial security. Make a New Year's resolution to balance your checkbook each time you receive a paycheck, so you don't spend more than you make. Keep track of your bills, and keep up with due dates. Create a monthly budget. Prioritize your expenses and spending, needs versus wants. Develop a diversified savings plan and recognize the early warning signs of debt trouble and don't wait. "You should be planning this week for next Christmas," Garrison said. Opening a christmas club or some other type of savings account now will eliminate the stress of worrying about Holiday debt this time next year. If you know you're going to have problems making payments, you can contact your creditors to explain your situation and what you're doing to meet your obligations. Depending on their policies and your situation, you may be able to negotiate the amount of your next payment. Consumer credit counseling service is a non profit community service agency.

I recommend these links on credit counseling:

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