Question:
Dear Steve,
A friend of mine is wondering if Greenpath is reputable.
Is Greenpath a reputable credit counseling service?
Traci
Answer:
Dear Traci,
These kinds of questions are as tough to answer as those that ask if some company is a scam.
People have their own definitions of words like reputable or scam. I don’t know what your friend thinks reputable means.
I’ve known GrenPath for many years. The issue is not if they can’t enroll someone into a debt management program, collect the monthly payment, and distribute it to the creditors. I have no doubt they can do that professionally.
The real issue has to do with if a debt management plan is the right solution given your friend’s situation.
Too often I see people select the solution to deal with their debt before understanding the situation they are in.
It’s like planing a trip to a destination without understanding where you are, to begin with.
One issue consumers either are not aware of or don’t understand is that all sorts of debt relief solution providers have no responsibility to provide an overall assessment of someone’s situation and make a recommendation based on what makes the most financial sense for the individual.
You can’t be any surprised that bankruptcy attorneys sell bankruptcy, settlement companies sell settlement, and counseling agencies sell counseling. They tend not to like each other and talk down the other solutions.
I’ve tried to put together this online calculator to help people understand what each of the major debt relief solutions means for them.
I would imagine that your friend is looking for the best advice about how to deal with their debt. The only true way to get that is to talk to a debt settlement company, a bankruptcy attorney, and a credit counseling company.
A key question to ask anyone that you are considering for debt help is if they have a fiduciary duty to represent your best interests. One entity defines fiduciary by saying, “A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interest ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other’s best interests.” – Source
Part of the discussion with debt relief providers should be about her future financial goals and how each solution can help achieve those goals.
For example, Enrolling in a debt management plan can make financial sense if the person can make their current payments and save for retirement at the same time. The counseling program would reduce the interest rates being charged on the included cards. That is a good thing.
But the cards will be closed by the creditors, which may impact the credit score, and if enrolling in a repayment program prevents someone from saving for retirement at the same time, the future lost retirement could be huge.
To see what the potential cost of lost retirement is, use my calculator here.
As you can see, deciding who to use for debt help is not straightforward when you factor in all of the issues surrounding dealing with debt.
So rather than steering your friend away from GreenPath, I would much prefer it if she did some research and asked the right questions to feel comfortable they are making the best decision.
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Asked question about GreenPath for a friend.
Traci, let me know what your friend decides to do about their problem.