It's obvious that the consumer credit counseling process works best when creditors play their part. Experts agree that this part includes:

Making a timely referral. "If you're hearing your customer say that there just isn't enough money to go around, that's a clear indication to call in a credit counselor," says one veteran counselor.

Trusting the counselor. "Many creditors don't understand what counseling is about," he continues. "They think that it's risky and would rather stick with standard collection routines. Unfortunately, the result is often that a customer goes bankrupt. It's much better to keep people going and to have them send small payments than to end up with nothing."

He lists the following advantages that counseling services bring to creditors:

• You don't have to devote your people to the collection.

• The counselor sets up the payment program. "If the debtor cannot pay on a reduced program, we'll suggest you contact an attorney," he says. Meanwhile, your people are free to follow up on other accounts.

• The customer is rejuvenated. In many cases, bankruptcy is avoided and the customer will qualify for a new line of credit. "You don't want to turn a customer off forever."

• Costs are minimal. Typically, the group asks for a "fair share" of 10%, but it's voluntary. "It's the cheapest collection in town," he notes.

• The check you receive will not bounce. The counseling organization issues the creditor a check from its own account.

• Counselors know the total indebtedness of the client. "Other agencies would only see a piece of the picture. We have a list of all their obligations, and we divide the money equally among all creditors."

When should you turn to a counseling agency? "If it's just a matter of a customer paying $20 instead of $40, you can certainly schedule that yourself," he says. "But if you know that there's going to be tremendous competition for the money and feel the customer will be overwhelmed, then it's time to turn to counseling."

Editor's Note: This article originally appeared in the Credit & Collection Manager's Letter.