Credit Counseling - Are you overwhelmed with debt

[ Bookmark this page! ] [ get HTML Version ]

Every other individual you know is knee deep in debt. This can lead to financial disaster if you do not act quickly to reduce debt and regain control of your finances. As easy as it is to get into a shopping spree with plastic, it is very difficult to cut your debt or become debt free. It takes a lot of effort, patience and due deligence on your part. Credit counseling is a viable option for those seeking relief from debt. Credit counseling can help reduce or eliminate your debt. So when you feel overwhelmed and deep in debt, seek help of a good credit counselor who can help you get out of the debt mess. There are for-profit and non-profit credit counseling agencies to help you with your debt problems.



Bad Credit - What do I do
Most people do not understand the consequences of having bad credit. They believe that they can just make mistakes with their money, and one day they will wake up and everything will be all right. However this is not true. Your personal credit is one of the most important things that a person can have in life. The ability to buy a house, a car, or finance any other major purchases will depend heav... Read credit counseling article



Credit Counseling - Are you overwhelmed with debt
Hundreds of thousands of people overwhelmed with debt -- often credit card debt -- are turning to nonprofit credit-counseling agencies that have become as ubiquitous as ATMs.

But just like fast access to your cash, getting out of debt quick and easy isn't always good for you.

Many of these counseling agencies -- and I use the word "counseling" loosely -- have been set up merely to collect fees from debtors in exchange for negotiating an easy once-a-month debt-repayment plan. They do little if any debt counseling, so many people end up right back in credit card trouble.

Other credit-counseling agencies may be classified as nonprofit, but they aren't in business for the public good. They are often hooked up with profit-making ventures, such as companies that make debt-consolidation loans.

In fact, so many of these operations are questionable that the Internal Revenue Service, the Federal Trade Commission and state regulators recently teamed up to warn people about the problems that can occur when using an unscrupulous credit-counseling organization.

For example, some debtors end up paying high fees to set up a debt-repayment plan. Others end up with worse credit records than before they sought help because the credit-counseling agencies don't pay their clients' bills on time -- or at all.

The IRS, FTC and state agencies are urging consumers to be cautious when choosing a credit-counseling organization. They recommend the following:

" Don't be in such a rush to get your debts settled that you fail to read your contract. Understand exactly what services are being offered. If you are promised anything, get it in writing. Watch out for outrageous claims. For example, one credit-counseling organization I found on the Internet is promising that people can pay off their credit card debt for 50 cents on the dollar. "I find that hard to believe," said Lydia Sermons-Ward, senior vice president for marketing and communications at the National Foundation for Credit Counseling. "Most creditors are taking consumers through an enormous amount of scrutiny before they even reduce interest rates or over-the-limit charges." Credit card companies are rarely, if ever, settling for less money than owed, she said.

" Don't go for the hustle that the fees the organization requires are "voluntary contributions." Either a fee is required or it is not. Watch out for high monthly service charges. Most agencies now charge fees to set up a monthly debt-management program, also known as a debt-consolidation plan. Some agencies charge as much as a full month's consolidated payment -- usually hundreds of dollars -- simply to establish an account. In general, if the setup fee for a debt-management plan is more than $50 and monthly fees are more than $25, go elsewhere. If extensive credit counseling or other services are being offered, however, higher fees may be appropriate.

" Don't believe that an agency can remove legitimate negative information from your credit report. It is illegal for any organization to represent that negative information, such as a judgment or bankruptcy, can be removed from your credit report. Most negative information remains on your credit report for seven years. A bankruptcy stays on for 10 years.

" Don't sign up for a plan and do nothing to check whether your creditors are receiving their money. You can do bad all by yourself. Missed payments by the credit-counseling agency can still be reported to the credit bureaus.

" Don't neglect to do some homework. For example, call your local Better Business Bureau to find out whether the credit-counseling organization you're thinking about using has had a history of problems with clients. Go to the Web site for the National Association of State Charities Officials (http://www.nasconet.org/) and find the state agency that has oversight of charitable groups in your area. Check to see whether any complaints have been filed against the nonprofit.

The IRS says it plans to look at many of these credit-counseling organizations to see if they are truly nonprofit. IRS officials are concerned that some that may have qualified for tax-exempt status are really operations that automatically spit out debt plans the way ATMs dispense cash.

If an organization's primary function is to steer people to fixed debt-payment plans without offering significant education and counseling, the organization doesn't qualify for tax-exempt status, the IRS said in a statement.

Of course, there are many legitimate credit-counseling groups whose mission is to help people get out of debt and stay out.

But I'm glad the IRS is on this case. It's about time. Maybe the agency will eventually weed out the greedy groups that just want to collect fees with little regard for people's financial well-being.

Until the bad players are gone, however, if your credit mess stems from your spendthrift ways, get some serious financial counseling. Otherwise, your fast track out of debt won't last any longer than the $20 you're always getting out of the ATM.

Bookmark this page | Search this site | E-mail to a Friend



Credit counseling - The trick is finding the right agency

"Can't pay your bills? Tired of endless phone calls from collection agencies? We can help!"

Credit counseling advertisements are everywhere. And, if you're like many Hoosiers suffering from a holiday spending hangover, going to see a counselor might seem like the perfect answer.

The trick is finding the right agency.

"If it's a reputable company, I don't think that's going to set you backwards," said Barbara Crane, president of Indy's Momentive Consumer Credit Counseling.

But just because many agencies are classified as nonprofit doesn't mean they're looking out for financially strapped consumers. Some charge a fee to set up a monthly payment plan with creditors, then send the debtors out the door without any counseling or education to help them better manage their money. Other credit counseling agencies are in bed with for-profit firms that offer debt-consolidation loans.

"There's no quick fix solution, unfortunately," Crane said. "Unless there is a relative that is wealthy that remembers you in the will or winning the lottery, but usually it doesn't happen."

Credit counseling agencies promising and guaranteeing services should be questioned, Crane said.

"We are accredited by the national foundation for credit counseling," Crane said. "We have to report on a regular basis. We have peer reviewers and we have standards to follow."

(For agencies that do charge for the service, the average costs in 2002 were $13 for a budget counseling session, $23 to enroll in a debt management plan and $14 each month for debt management plan services, according to the National Federation for Credit Counseling, the largest and oldest nonprofit credit counseling organization.)

Because there are so many shady credit counseling servicesout there, the Internal Revenue Service, the Federal Trade Commission and state officials are trying to give consumers a heads up. Tips for your search

Check it out. The Better Business Bureau can help make sure the agency is legit. Visit www.indianapolis.bbb.org.

Read the contract. A written agreement should spell out in detail the services to be performed; the payment terms for services, including the total cost; how long it will take to get results; any guarantees offered; and the organization's business name and address.

Don't make your situation worse. Some organizations work for free, but others charge a fee. Watch out for agencies that package their requisite service fees as "voluntary contributions." That's an oxymoron: If the fees are voluntary, you don't have to pay them.

Follow up. If your payments are being made through the credit counseling agency, call your creditors and make sure they're receiving payments. Even if you are working with a credit counseling service, late or unpaid bills will still damage your credit.

For more information, visit www.ftc.gov or www.irs.gov.




Top rated articles for credit counseling

1. VantageScore
I recently saw on CNBC that a new credit bureau called VantageScore is trying to update and levelize the way that credit scores are tabulated for creditors. Their "leveled credit characteristics" acro... Read credit counseling article

2. Bad Credit Home Loan To Get You Out Of Debt
A "bad credit home loan" can help you climb your way out of debt and get you started back on the road to upstanding, good credit. There are many lenders who are willing to make bad credit home loans t... Read article

3. Credit Counselling or Debt Management Plan
I am often asked to explain the various options for dealing with debt, and most of the time people want me to start with options that do not involve personal bankruptcy. Assuming a debt consolidation ... Read credit counseling article

4. How To Quickly Improve Your Credit Score
Most people once they find out their credit score is not so great are very anxious. Their most common question is, How Can I Quickly Improve My Credit Score?

American's have become an insta... Read credit counseling article

5. Credit Scoring - Truth Revealed
Credit scoring is system that most creditors and business use to determine if to issue credit cards or loans to an individual. When you apply for credit, creditors reserve the right to administer a fu... Read credit counseling article

6. Credit counseling - They do not have all the answers
Are "They" Right? I had heard (one of those things that "they" say) that checking your own credit report lowers your credit score. Is that true and will the score be hit three times if ordering all t... Read credit counseling article

7. Creditors and the Truth
In my previous article I discussed how prior to the Fair Credit Reporting Act most bill collectors would change account information to suit their needs. This is not a fallacy. Many creditors provide t... Read credit counseling article

8. Home Mortgage: Bad Credit Won't Rule Out a New Home
When you're looking for a way to afford your dream home, home mortgage bad credit options can offer a way to get you into the home that you want to buy. Not long ago, people with less than perfect cre... Read article

9. Credit counseling - Credit Repair Companies
Let's be crystal clear, right up front. Paying someone to "fix" your credit is a waste of your time and money, since the negative issues that are temporarily removed from your file will only reappear ... Read credit counseling article

10. Credit Counseling or Bankruptcy - Soon You May Have No Choice
If you are looking for a quick debt consolidation than you should be alarmed with the ongoing legislation to severely limit the ability to file bankruptcy in cases where people have the ability to pay... Read credit counseling article


Credit Counseling and Debt consolidation services in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,



Credit Counseling - Are you overwhelmed with debt
Debt consolidation services in Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,

Debt consolidation services in Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin and Wyoming.

Add website or submit URL link of your site to 1000 free directory
50 Hume, VA credit counseling - Washington DC 49 Huntingtown, MD credit counseling - Washington DC 48 Huntly, VA credit counseling - Washington DC 47 Hyattsville, MD credit counseling - Washington DC 46 Ijamsville, MD credit counseling - Washington DC 45 Indian Head, MD credit counseling - Washington DC 44 Inwood, WV credit counseling - Washington DC 43 Ironsides, MD credit counseling - Washington DC 42 Issue, MD credit counseling - Washington DC 41 Jefferson Manor, VA credit counseling - Washington DC 40 Jefferson, MD credit counseling - Washington DC 39 Jeffersonton, VA credit counseling - Washington DC 38 Jersey, VA credit counseling - Washington DC 37 Junction, WV credit counseling - Washington DC 36 Kearneysville, WV credit counseling - Washington DC 35 Keedysville, MD credit counseling - Washington DC 34 Kensington, MD credit counseling - Washington DC 33 Keyser, WV credit counseling - Washington DC 32 King George, VA credit counseling - Washington DC 31 Kinsale, VA credit counseling - Washington DC 30 Kirby, WV credit counseling - Washington DC 29 Knoxville, MD credit counseling - Washington DC 28 La Plata, MD credit counseling - Washington DC 27 Ladiesburg, MD credit counseling - Washington DC 26 Lake Ridge, VA credit counseling - Washington DC 25 Landover Hills, MD credit counseling - Washington DC 24 Landover, MD credit counseling - Washington DC 23 Langley Park, MD credit counseling - Washington DC 22 Lanham, MD credit counseling - Washington DC 21 Largo, MD credit counseling - Washington DC 20 Laurel, MD credit counseling - Washington DC 19 LaVale, MD credit counseling - Washington DC 18 Laytonsville, MD credit counseling - Washington DC 17 Lebanon Church, VA credit counseling - Washington DC 16 Leesburg, VA credit counseling - Washington DC 15 Lemasters, PA credit counseling - Washington DC 14 Leonardtown, MD credit counseling - Washington DC 13 Levels, WV credit counseling - Washington DC 12 Lexington Park, MD credit counseling - Washington DC 11 Libertytown, MD credit counseling - Washington DC 10 Lignum, VA credit counseling - Washington DC 9 Lincoln, VA credit counseling - Washington DC 8 Linden, VA credit counseling - Washington DC 7 Little Orleans, MD credit counseling - Washington DC 6 Lonaconing, MD credit counseling - Washington DC 5 Lorton, VA credit counseling - Washington DC 4 Lost City, WV credit counseling - Washington DC 3 Lost River, WV credit counseling - Washington DC 2 Lovettsville, VA credit counseling - Washington DC 1 Loveville, MD credit counseling - Washington DC