Credit counselling and debt management themselves are not inherently scams or tricks. They’re effective preventative measures for managing debt and avoiding costly bankruptcy that can seriously affect your credit. As with any company that provides a service, there are true-blue companies who want to help and scam artists who just want your money. 

The stigma that they are scams stems from the fact that there are quite a few of these companies who are not reputable and do not help very much and from the fact that these services have a fairly low success rate due to either lack of participation from debtors or debts that are unmanageable. 

The problem is that the unsavoury companies give all the other companies a bad name. Bad publicity always spreads faster and harder than good publicity; after all, are you more likely to tell people about a really good experience or a really bad experience? Generally, when we have a major issue with a company, service or product that we invest money into we are more likely to outcry about a bad experience (perhaps in a subconscious ploy to help others avoid the same issue) than to praise a good experience (If everything went fine you feel the transaction is complete). 

Another reason people are generally untrusting of these companies is because the results are not always 100% stable.  

In general, loan consolidation is the most effective method of handling debt; it also carries the greatest risk (a new, secured debt).  

Second in the list is debt settlement because it imparts actual third-party action with your creditors and debt settlement companies are usually going to get a better response than you are; the only risk here is the price, which is usually not negligible.  

Last on the list is credit counselling. Credit counselling carries the least amount of risk because it’s generally affordable but it also has the least powerful effect because it’s usually little more than a financially-themed therapy session. For many people it’s an essential step and it can provide you with the information you need to turn your debt situation around but there’s nothing a credit counselling agency can do or tell you that you can’t do or find out for yourself. 

If the company’s fees are reasonable, credit counselling and debt management is a relatively low-risk tactic that is worth considering before trying bankruptcy. 

So, as you can see, there is definitely an opportunity to be helped but there are also circumstances that prevent people from being helped.