Credit counseling - Keep your debt in check

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While looking around for a credit counseling agency, it is best advised to select an agency that is non profit. Non profit consumer credit counseling agency will charge you a very minimum initial payment and subsequent monthly payments to setup a plan to pay all your creditors. A non profit credit counseling agency will also work with your creditors in reducing interest rates with your personal debt and credit card debt and help you achieve a debt free living. If the credit counseling agency is not a non profit entity, you might end up paying much higher in fees and monthly recurring charges than if you choose to work for a non profit credit counseling agency.



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 to you - a loan based on your equity in your home even if your credit has slipped or isn't as perfect as it could be. By taking out a bad credit home mortgage or home equity loan, you can consolidate a... Read article



Credit counseling - Keep your debt in check
Before Hibbert Hill left for a study-abroad program in Australia last spring, he signed up for another credit card. One more wouldn't hurt, thought Hill, then a sophomore at Iowa State University. "I didn't plan on using [the card]," says Hill. "But Australia was a blast." The price tag? Over $10,000.

Luckily for Hill and others in his predicament--the average college student carries $2,327 in credit card debt--some schools are providing credit counseling to their students. Montana State University in Bozeman, for example, operates Student Advocates for Financial Education. During a typical session at the busy office, counselors help students map out a budget, track expenditures, and find ways to cut back on expenses. "Tuition has gone up, the cost of living has gone up, and student wages have not kept pace," says Deborah Haynes, an associate professor at the school who oversees the program.

Payback. Students up to their ears in debt can also turn to nonprofit credit counseling firms. These organizations can work out repayment plans directly with creditors or consolidate bills into one monthly statement, something on-campus centers may not be able to do. But be wary of scams. Counseling should be free or nearly so, and debt-management plans shouldn't cost more than $50 to set up and $35 in monthly charges, says Travis Plunkett, legislative director with the Consumer Federation of America.

Back at Iowa State, Hill struggled to make ends meet, barely affording the monthly minimum charge on four credit cards and a line of credit. He went to the Financial Counseling Clinic at Iowa State, which offers to work with creditors to lower interest rates, but quickly realized he needed a more disciplined approach. He left school to move in with his parents in Minnesota and is now taking classes at a local community college. And he signed up with Lutheran Social Services, a nonprofit group in Duluth, Minn., that offers credit counseling and debt management.

Hill is now on a tight budget. Two thirds of what he earns each month working at a bank goes toward his credit card debt: He pays $65 to Lutheran Social Services each month--the organization keeps $5 and disperses the rest to two credit card companies--and coughs up an additional $420 to pay off his other cards and the line of credit. "It's a big burden," he says. "But it's going to be solved." -Nisha Ramachandran

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Credit Counseling - Debt Consolidation

Desperate. Overwhelmed. Out of control. Helpless. Do any of these words describe how you are feeling because of your financial situation? These days, millions of Americans are suffering. Not only financially, but emotionally, physically and mentally because of the amount of money they owe to major credit cards, department store credit cards, the IRS, and hospital/medical bills. There are many ways people get themselves into debt. Overspending. It may have started with a simple department store line of credit. You thought you'd charge a few items just to establish good credit and pay your bill off quickly. Months or years later, you've spent way beyond you're means and you're sitting with your bills sprawled out on a table, in debt, and wondering how this happened to you. Misfortune. Maybe you or your spouse became ill or needed a surgical procedure that left you with countless hospital or doctor's bill. It could have been that you lost your job and owe back taxes. The IRS might not be very sympathetic to the fact that you need some time to get back on your feet and find another job. No matter how it happened, the fact still remains that you are in debt, and it is unlikely that a fairy godmother will magically appear and wave her wand to make your bills disappear. Ignoring your financial responsibilities can bring on legal issues and leave serious damage to your credit report causing problems for you in the future. It's time to take some action and make some decisions about your debt.

There are few options for those who are in debt. As mentioned, to ignore it will only worsen your situation. You could continue to pay the minimum monthly payments. Although it seems like you're making headway, most likely you're barely making a dent in your balances. Most people fail to do the math. Let's say you owe $1,000.00 on a credit card that has an Annual Percentage Rate (APR) of 20%. This means that your monthly statement is being increased by 1.66% a month. Now let's say your minimum monthly payments are $35.00. This means that only $18.00 of that $35.00 minimum payment is actually going towards your balance. The other $17.00 is being used to pay your percentage rate. Looking at this equation when your debt far exceeds $1,000.00 you will realize that it will take you years and years to ever get ahead. So it's back to the drawing board.

Let's look at Bankruptcy. Bankruptcy will in essence put an end to your debt and offer you a fresh start. Trouble is, it will also put an end to you obtaining credit in the future. When one declares Bankruptcy, you are legally declaring that you are unable to pay your debt. When we say legally, we mean that papers are filed with the United States Bankruptcy Court. Lawyer fees are involved and can range anywhere from $500 to over $1,000.00. Some types of debt cannot be erased by filing Bankruptcy such as taxes, alimony or child support. This form of action will seriously effect your credit report for up to 10 years, making it almost impossible to do things like buy a home, a car, or even find employment.

Other ways to help get you out of debt are the various types of Debt Consolidation LOANS. One way is by taking a second mortgage or a home equity line of credit. They can come with high interest rates and can cause you to pay "points". One point is usually Equal to 1% of the amount borrowed. So if you have 10 points on your credit report, you will be required to pay an additional 10%. Another disadvantage is that depending on where you live, taking a second mortgage or home equity loan could require that your home be used as collateral. If your payments are not made or late, you could lose your home. Then there are finance companies that will offer you a lump sum to pay your debt off completely. The upside is you end up only paying one bill a month to only one creditor. The downside is that these finance companies usually charge exorbitant interest rates and can drag out your payments causing you to pay them for a longer period of time while they make more money. Next you can try the low interest credit card and do what's called "balance transfers". This is a legitimate credit card offered with a very low interest rate under the stipulation that you can only obtain this rate by transferring your remaining balances with the very high interest rate in an attempt to pay off your debt faster at the lower rate. The trouble with this option is that the fine print will most likely reveal that these low rates are for a limited time and probably will not be long enough to pay it off. When the promotion is ended, the interest will go back up and you now have another credit card to entice spending. Exactly what you don't need.

This takes us to the option that most people are unaware even exists. Debt Consolidation. Much different than a Debt Consolidation Loan, Debt Consolidation is a process by which a company can negotiate with all of your creditors to obtain the lowest monthly obligation needed to satisfy all of your current accounts. You pay one lump sum monthly, which is in turn portioned out to your creditors. This monthly payment will in almost all cases be lower (sometimes by as much as 50%) than the sum of your individual account obligations. Creditors recognize that people who enter a Debt Consolidation program are trying to repay their debt in good faith. Creditors are more willing to extend favorable terms such as reducing and/or eliminating both interest and late charges to Debt Consolidation clients. The creditors benefit as well by avoiding the significant expense of turning the account over to a collection firm or avoid an extended drawn out process if the account holder goes through with bankruptcy proceedings. This option is easily achieved by most people in debt, provided the Debt Consolidation Company you are working with is a highly reputable one.

Here at Debt Management Credit Counseling Corporation (www.dmcccorp.org) we have the reputation to do just that for you. We are a non-profit corporation committed to assisting consumers who have had the unfortunate experience of becoming over extended with debt. In addition to our Debt Consolidation program in which you can become a member of, we also provide you with educational information. Our mission is to provide quality educational services and programs to the community on financial matters. To provide professional credit counseling with a debt repayment plan that is fair to both clients and creditors. Maintaining fiscal integrity and utilizing quality standards and controls will accomplish this.

Whatever path you decide to take, we hope that we here at Debt Management Credit Counseling Corporation have provided you with the information you need to make your choices a little clearer, a little easier. After all, knowledge is the key to freeing yourself from the financial chains that bind you. We look forward to being the light that guides you to financial freedom.




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Credit counseling - Keep your debt in check
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