FACING A STACK of bills you can't handle? Take heart. While there are some unscrupulous people who prey on consumers with credit problems, plenty of nonprofit organizations still remain true to their founding principle: helping folks get out of debt.

The National Foundation for Credit Counseling (NFCC) counsels American households through its more than 115 member agencies in offices nationwide. Whether they simply seek financial advice or choose to enroll in a debt-repayment plan, many of those families or individuals carry thousands of dollars in debt, often more than their annual income. Much too often, they have run into trouble because of a life-changing event like a job loss, death, illness or divorce. Credit counseling is also now a required step in bankruptcy filing.

Before you pay an outside counselor for help, however, you should be sure that you've tried all the easy solutions first. For instance, have you considered a loan from a family member? To make sure your lender won't get stuck with an unexpected tax bill, read our story Loans Among Family Members. You should also consider a loan from your 401(k). Limits are as high as $50,000. For details, see our article Should You Borrow From Your 401(k)?

And have you considered consolidating your debt on a low-interest-rate credit card or tax-deductible home-equity loan? To find out whether that strategy makes sense for you, try our consolidation calculator. Of course, it's not easy to compare credit card offers these days; low introductory rates, subsequent rates and annual fees make it difficult. So use our credit card comparison worksheet. It will tell you which is the best deal. And don't miss our online buying guides for mortgages and credit cards.

Finally, we have to ask you the obvious. Have you tried to cut your expenses? Why not track your spending for a few months, then see what you can eliminate. This is probably the quickest avenue to debt reduction.

Choosing a Debt Counselor

Finding a good credit-counseling program can be a bit tricky. After all, it's not something you'd want to bring up with colleagues around the company water cooler. That means you'll have to do the legwork on your own. But there are a few things to keep in mind to make the task easier and less fraught with disappointment.

First, look for a nonprofit firm. You've spent too much already; why pay more now? Nonprofits get most of their funding from creditors, not you. Privacy isn't usually an issue, but it's wise to check what the agency's policy is. Make sure it won't sell your information. Also, check the enrollment and monthly fees. According to the Association of Independent Consumer Credit Counseling Agencies (AICCCA), many ask for only a nominal enrollment and monthly fee. In the past, a few shady agencies were known to charge the full amount of your monthly debt payment, plus an additional 10% each month, according to the AICCCA. Such excessive charges have been largely wiped out by IRS regulations and updated state laws.

Second, find out up front exactly what services you'll receive, such as counseling, a debt-repayment plan and budgeting advice. The more services, the better. You might want to have them put it all in writing and send you the information before you proceed.

And ask if the organization belongs to any professional groups, such as the NFCC or the Better Business Bureau. Have them explain how they're audited and if your funds are protected. After all, you're sending them your money.

One-Pay Plans

Once you've found a service you trust, pull all your bills together before talking to a credit counselor. She will figure out what you owe and work with you to determine how much you can pay each month. Then, instead of writing checks to each creditor, you'll write one to the service, which will distribute the money. The goal is to develop a plan that allows you to afford the necessities of life (even if that includes an occasional movie) and at the same time whittle away at the balances you owe.

Once you're in a program, the much dreaded phone calls from creditors should stop. Creditors have a right to call you, but if you arrange an acceptable payment program, they're not going to waste their time.

Negotiators at Your Service

Once you've set up a payment schedule, the counselor will talk to creditors and try to get them to reduce your interest rates and waive late fees to shorten your time in debt. The counselor may also coax creditors to "re-age" your account that is, report past-due amounts as current.

How come credit counselors have so much clout? Most creditors are glad to see you enrolling in a repayment program, agreeing to pay a little at a time, rather than heading for bankruptcy court. If those same creditors were to enlist the services of a collection agency, the agency would take perhaps half of whatever it recovered. So it's a better deal for your creditors if you voluntarily repay, even if it takes several years.

What's more, because such repayment organizations have existing relationships with creditors, they know what that creditor has arranged for other clients. If you tried to negotiate on your own, chances are you wouldn't be as successful.

If a one-pay plan is not enough to solve your problem, you might need to consider a debt-consolidation loan. Check out our "Should I Consolidate?" calculator to see if you'd be better off.

Budgeting 101

Once you're on your way to paying off your old debt, you'll need to set up a budget. Credit counselors can help with that as well. Most people don't know how much they spend each day. They may know about the big-ticket items, the rent and mortgage payments and the utility bills. But they lose track of how much they spend on extras like restaurants, dry cleaners and video rentals. If you write down everything you spend, you may be shocked at how much money you go through.

Many credit counselors say our credit card culture has obscured how much things really cost. The convenience of whipping out plastic to pay a tab makes it easy to overspend and forget about budgeting.

Counselors can help you track your spending. They teach you to record what you pay right down to the newspaper, bagel and mocha latte you grab on your way to work. Counselors are trained to walk debtors through every spending category and come up with an acceptable budget. The counselors check in with clients for several months to see how well they're sticking to their spending plans.

Many of these services can show you how your spending habits stack up to those of a "typical" American with your income.

A Word of Warning...

If you've somehow managed to keep your credit report clean as your debts have spiraled, you need to know there can be a downside to contacting a credit counselor. Not every creditor looks upon your involvement with one as a good thing. While many creditors think it's great because it increases their chances of getting paid, others might issue an alert on your credit report. That could affect your chances of getting credit down the road.

Not exactly what you're aiming for here. Is it worth the risk? That's something you'll have to decide weighing the chances your credit report will take a beating anyway if you keep falling further behind.