Scenario: You have more than $24,000 in credit card debt, and it's become impossible to meet the monthly payments. Should you visit a nonprofit credit counselor? Hire an attorney? Hit the Internet and sign up for one of those programs that promises to deliver "debt relief now?"

From politicians to personal finance experts, there's agreement that Pennsylvania needs greater scrutiny of the confusing array of companies offering financial counseling and debt management services to consumers drowning in credit debt.

But how best to do that? That's the subject of a surprisingly passionate Harrisburg debate, one that caught Philadelphia state Rep. Dwight Evans off guard.

Mr. Evans, Democratic chairman of the House Appropriations Committee, is sponsoring a bill that would require all companies providing credit counseling and debt management services in Pennsylvania to be registered. House Bill 2294 also would cap the fees that can be charged for setup consultations and debt management programs.

But the same bill also would, in effect, allow for-profit companies to engage in "debt-pooling," a service in which an intermediary is used to pay down personal debts. Heretofore, the service has been reserved for nonprofit agencies or attorneys acting on behalf of clients.

The nonprofits want it to stay that way.

"I don't understand the controversy," Mr. Evans said. "It seems to me there should be a stamp of approval on this credit counseling stuff."

Stamp of approval, yes. Opening the playing field up to for-profit companies, no, says Mary Loftus, a vice president with Advantage Credit Counseling Service, based in Pittsburgh. Their average client has a household income of $40,900, and owes $24,200 in unsecured debt.

"The people [who] we're counseling are in very vulnerable situations," she said. With some for-profit debt counselors, "they actually end up in worse shape than when they started" because of excessive fees, or because they've been steered into a program they don't need.

For example, Ms. Loftus said, of Advantage's many clients, only 30 percent need debt management, a program where in you pay a lump sum to the intermediary, who disburses it to your creditors each month.

But for-profit companies, she says, are more likely to direct you into a program that will produce revenue for the company, providing inadequate counseling along the way.

That's why, for so many years, credit counseling and management had been the domain of nonprofit agencies -- to protect people with poor credit from profiteers. (A change in federal bankruptcy laws requires that consumers consult a nonprofit credit-counseling agency as part of the bankruptcy process.)

But over the years, for-profit companies have been successful at convincing some states that the debt-pooling statutes are antiquated, relics of an era before the advent of credit cards and multinational banks.

"In a well-regulated environment, tax status shouldn't matter," said Doug Miskew, who handles government relations for CareOne Credit Counseling. The company can provide counseling in Pennsylvania, but isn't supposed to offer debt management services, thanks to state law (breaking the law is a misdemeanor offense).

The nonprofit agencies that are trying to keep the for-profits out of the state aren't doing it because they and they alone can best serve the consumer, he said. "I would guess that some of it is market-share related."

For-profits that want a toehold here also can point to testimony given at a May 15 House committee hearing on the "Debt Management Services Act," at which several nonprofits voiced their support for the bill.

But there's more to that support than meets the eye, Ms. Loftus said. Many nonprofits support such changes in law because the IRS has been investigating the entirety of the debt management industry. It's an area of commerce that has been tarnished by a few bad apples, namely AmeriDebt Inc., a Maryland nonprofit that is accused of pilfering millions from consumers deep in credit debt. Maryland, in fact, is now debating a similar bill with proponents saying consumers need more choices.

Also, the IRS is now imposing stricter guidelines for qualifying for tax-exempt status and many of the companies that had previously been awarded tax exemptions soon may be forced to convert to for-profit status -- which explains, Ms. Loftus said, why some nonprofits now support Mr. Evans' bill.

Mr. Miskew, for CareOne, agreed with the assessment.

"The IRS is coming down on these folks because the vast majority of [their revenue] comes from putting companies on debt-management plans," Mr. Miskew said. "There's nothing charitable about selling debt management products. ... Some of them will have to change their tax status to operate."

He also suggested his opponents on this issue were guilty of blurring the line between for-profit companies, such as CareOne, that set up debt-pooling plans, and those that engage in debt settlement -- you stop paying your credit card companies and pay the company instead. The settlement company then negotiates the payoff of your debt with your creditors, but your credit history can be harmed in the process.

"That's the Wild West of things," Mr. Miskew said.

CareOne doesn't do this, according to their Web site. "We're able to connect you with a national law firm providing this legal service," the site says.

In other words, a referral -- another way for the for-profit companies to make money, said Patty Hasson, director of Consumer Credit Counseling Services of Delaware Valley.

For a glimpse of what can happen when consumers without much financial acumen are stuck in the same room with a very good salesman, look no further than the current mortgage meltdown. In many cases, brokers steered borrowers into mortgages they couldn't afford. It might not be a smart move for the borrower, but the lender was willing to take on the default risk because of the opportunity to profit from the loan.

"If you look at the mortgage broker model, [the crisis happened] because a for-profit motive was introduced into an area where people with very limited knowledge are thrown into a very complicated, complex situation," Ms. Hasson said.

"When you take individuals at their most vulnerable, and you're looking as a company to make a profit from them, you're maybe not looking to put them in the right program," she said.