Debt Credit Counseling

Debt Credit Counseling

They are collection agencies working for and under the control of the major credit counseling card companies. Most of these agencies will be able to help you do lower your interest rates a little and usually only concerning credit cards. It will only work if the credit card companies are willing to participate. If you need to get rid of debt, credit counseling agencies are not the answer. By the time you need to relieve the financial pressures of your debt, knocking a little bit of interest off of your credit cards is not going to be enough.

A bankruptcy, on the other hand, can get rid of debt; this is why credit-counseling agencies hate them. The credit card companies and the counseling agencies know that bankruptcy can get you out from under their control. If you can’t pay your bills and are considering using a consumer counseling plan to get out of debt, you should at least find a bankruptcy attorney that gives free debt consultations and see how bankruptcy works.

In some cases, the credit counseling that runs ads on TV and more often on the Internet are scams. Be careful when an ad offers to make you debt-free without having to file bankruptcy. More often than not, the old saying that “nothing in life is free” holds, and the victims of these scams send these scam organizations their money and never get anything in return.

The second scam is the “save 60% in just seconds,” a credit card counseling sales pitch. The first problem with this is that even if the credit counseling agency is real, they only represent the credit card companies, so they can only help you out with your credit cards. When you take this into account with the fact that all that they will be able to save you is money off of the interest, you can see you will not be saving enough money to help you get back on your feet.

Finally, the real problem with the credit counseling agencies is that even if they are not a scam, they are in effect looking out for the credit card companies’ best interests. It is how credit counseling agencies work. First, they work with credit card companies and get them to agree to lower interest rates in exchange for an agreement that outlines regular monthly payments set up by the credit counseling agency. Why do credit card companies decide to do this? The main reason is to keep you out of the hands of bankruptcy attorneys. Bankruptcy laws are to get the citizens out of debt, not interest debt.

Only bankruptcy can get you out of your debt; this is why the credit card companies and credit counseling agencies like to make bankruptcy seem so evil. Nobody wants to file bankruptcy, but there comes the point when you realize that you can no longer afford or ever pay off the debt that you have accumulated. When you get to this point, a credit counseling agency may seem like a great alternative. Still, chances are you will just end up in the same situation until you decide to file bankruptcy and relieve your financial burden.

Debt Consolidation

Debt Consolidation

Top Tips to Help You with Your Debt Consolidation

Has debt taken over your life? Do you want to resolve your debt for good? Then you are ready for debt consolidation. The information that follows may help you out when you want to consolidate your debts. These tips can help you get on the proper track again.

Understand the difference between debt consolidation and a home equity loan. Many companies will guise a home equity loan (where you put your home on the line for the debt) as true debt consolidation. That’s not always the wisest move to make, especially if you have a family involved. Know the differences and the risks before making that decision.

Avoid debt elimination arbitrators. These companies love to claim that your debt can be eliminated, though in reality they know that only bankruptcy can result in total elimination. The best these companies can do is reduce the debt you owe. Surprisingly, this is no different than you could do by calling and negotiating with creditors yourself.

Before choosing a debt consolidation company, ask how the counselors of the company are paid. If the answer is “on a commission basis”, then you may be best to look elsewhere. Someone working for commission will say or do many things that are less of a help for you and more of a help to their overall income.

Communicate with your creditors as much as possible. Let them know you fully intend on paying your debt back and ask if you can negotiate. Creditors know they have more chances of collecting on your debt if they stop charging you for late fees or interests and establish small monthly payments.

Speak with your creditors and let them know that you are planning to employ a credit counseling agency. They may offer you different arrangements. This is crucial, as they’re probably unaware you’re speaking with others. If you show them you are trying, they might want to help you out.
Consider taking out a consolidation loan to pay your debts. Then, call and try to negotiate a lower settlement with your creditors. Lots of creditors are willing to accept a fraction of what is owed if you pay them immediately. Not only does this not hurt your credit score, it might even boost it!

Look for a debt consolidating company has counselors that are certified. Research the NFCC to find qualified firms. Doing so will give you confidence in your decision and choice of company.
If your debts aren’t truly putting you on the brink of bankruptcy, debt management might be a better solution for you. A company will work on your behalf to talk to your creditors and ask them for lower interest rates or payment plans you can handle. This can be a better solution than consolidation in many cases, so try it first. All of these tips can help you decide if consolidation is for you.