QA

I don't want to get caught up with the wrong kind of debt consolidation company. What should I look for before I choose one?

--Sandra Clair Grand Rapids, Michigan

Before you look for a debt consolidation company, first determine if that's the service you need. According to Mike Kidwell, vice president and co-founder of the Rockville, Maryland-based comprehensive financial crisis center Myvesta.org (www.my vesta.org), debt management programs are for people who are behind on their bills. He says, "It's not a program that you can join for added convenience or just to attain a lower monthly payment or reduced interest rate."

That said, Kevin Thomas, president of American Debt Consolidation Inc., a nonprofit credit counseling agency in Fort Lauderdale, Florida, suggests that you choose a nonprofit company because "creditors tend to offer nonprofits better terms than for-profit corporations." Also, ensure that the debt consolidator deals with the type of creditors you owe. Some firms, for example, won't handle secured debt, such as mortgages or auto loans. In this case, they can only negotiate with holders of, your unsecured debt: the IRS, credit card firms, hospitals, or banks.

As with any consumer transaction, you should find out how many years the company has been in business and check it out with your state's Better Business Bureau (www.bbb.org). For a full list of questions to ask your credit counseling agency, go online to (www.myvesta.org/resources/rs_ questions.htm)