Consumer Credit Counseling Service

Consumer Credit Counseling Service Legitimate consumer credit counseling services are not easy to find, as many of them have come under public wrath of late. A common criticism about credit counseling is that participating in such a plan ruins a consumer’s credit which also has led to charges that credit counseling is a marketing gimmick … Continue reading “Consumer Credit Counseling Service”

Consumer Credit Counseling Service

Legitimate consumer credit counseling services are not easy to find, as many of them have come under public wrath of late. A common criticism about credit counseling is that participating in such a plan ruins a consumer’s credit which also has led to charges that credit counseling is a marketing gimmick the lending industry makes use of. Probably it is for this reason the experts opine that credit counseling is ineffective. But one must not forget that credit counseling is not the same as debt consolidation.

In the forefront is the Christian credit counseling which is making a difference in this field not just by demonstrating genuine intentions but also by offering credit counseling in an affordable way to consumers. It helps consumers take steps to improve their credit.

A consumer credit counseling service has the goal educating debtors of different consolidation ways. Of which the secured debt credit is the one with which you can avoid unnecessary additional clerical costs and also prevent legal actions against you. In short credit counseling is designed to persons who are neck deep in debt.

The Statutory Bindings

If you are looking for information on nonprofit credit counseling agency Christian credit counseling is your natural first choice. Like all nonprofit organizations they have an obligation to educate and counsel the needy people. All nonprofit credit counseling agencies are bound by nonprofit corporation statutes and comply with state charitable solicitation laws. This is why nonprofit credit counseling agencies provide free services or at least charge minimal fees to recover their cost. It helps to keep in mind that appropriate Federal and Senate committees have taken cognizance of the profitable nature of some of the nonprofit credit counseling agencies.

In fact, for more than five decades now, nonprofit credit counseling organizations are helping consumers. Those providing assistance to consumers credit counseling and debt management services must keep your private information confidential. Rules are put in place to limit the fees a nonprofit credit counseling firm charge their clients. Californian licensed nonprofit credit counseling firms must file their financials with the statutory agencies regularly.

However, some community credit counseling services are setting precedence and are taking their services beyond expectations. If you act sensibly you can actually get free counseling and debt consolidation advice from them.

Here Are Some Helpful Steps

List out all community based and nonprofit credit counseling services.
Checkout their accreditations and business histories through their websites and testimonials.
Talk to them before signing any documents.
Don’t leave anything to ambiguity; get their and your obligations in writing.
Take help from The National Foundation for Credit Counseling for researching about some credit counseling organization.
You must always remember, at the back of your mind that, credit counseling is a legal and ethical alternative to file bankruptcy. In any case, credit counseling is a viable option before meeting a bankruptcy attorney. For an industry having more than its share of questionable reputation, at least this is the only way out. In addition, for those consumer credit counseling agencies in the for-profit side of the industry, the problem is that the fees are rather too high and typically take long times to clear off the debt. However, the bottom line is credit counseling is still best if you want a total makeover of your finances.

Debt Consolidation Credit Counseling

Do you need debt consolidation credit counseling? If you are deep in debt and headed for personal bankruptcy you might need to consider credit counseling.

Debt consolidation credit counseling is an important undertaking. Avoiding bankruptcy and keeping your credit record intact are two keys to financial success. You also need to know how to distinguish a good credit counseling agency from a bad one. There are many good credit counseling agencies out there but some are bad apples. It is important to understand how credit counseling can effect your credit report. Also be aware of a key change to the bankruptcy laws that involve credit counseling.

What is Debt Consolidation Credit Counseling?

Debt consolidation credit counseling agencies provide a service to people who are in over their heads in debt. Credit counseling agencies provide counselors, education, and Debt Management Plans (DMP). A Debt Management Plan is a service where consumers send an agency a lump sum payment which is then distributed to creditors who have agreed to the plan. Creditors sometimes agree to lower interest rates, waive fees, and post updates to credit reports as well. The convenience of making one payment to a single credit counseling agency is also a plus. The problem with Debt Management Plans is they only address unsecured debt. Secured debts such as home loans or auto loans should be prioritized and paid first. You risk losing your home through foreclosure and your car through repossession if you fail to make your payments.

How to Find a Good Debt Consolidation Credit Counseling Agency

A good credit counseling agency is one that offers an in-person consulting in your local area. Services beyond Debt Management Plans including personalized education are also good options to expect. The National Foundation for Credit Counseling (NFCA) and the Association of Independent Consumer Credit Counseling Agencies (AICCCA) are the key industry groups for credit counseling agencies to be members of. Ideally you want a counselor who will give you personal attention and present you with all of your options. You don’t want to feel pressured into a bad decision.

Some Debt Consolidation Credit Counseling is a Scam

With consumer debt at an all time high and federal personal bankruptcy laws requiring credit counseling many aggressive agencies have opened up shop targeting unsuspecting consumers in need. Non-profit credit counseling status does guarantee legitimacy or trustworthiness. In many states non-profit status is a requirement for a debt consolidation credit counseling agency to do business. Another caveat is that some not-for-profit credit counseling agencies are closely aligned with for profit businesses. Some debt consolidation credit counseling agencies charge excessive fees and only push DMPs. Asking good questions and referring to credit counseling agencies on the NFCA and AICCCA lists will help you sort the wheat from the chaff.

How Debt Consolidation Credit Counseling May Effect Your Credit Report

When you enter into a Debt Management Plan creditors will often make updates to your credit report. These updates include “re-aging” accounts and removing delinquent payment references. A potential drawback is that since lending is subjective, lenders may consider the notes your creditors put on your report as a good or bad sign. A good sign would be that you took steps through credit counseling to take care of your debts. A perceived bad sign would be that you had so much debt that it became unmanageable and you may be a credit risk. In the long term this may effect your credit score.

Debt Consolidation Credit Counseling and Personal Bankruptcy

If you decide that personal bankruptcy is the best course of action for your situation, you need to be aware of a key change to the bankruptcy laws. Before you can file for bankruptcy under either Chapter 7 or Chapter 13 you need to know the law. Changes in the Federal bankruptcy laws brought about by the Bankruptcy Act of 2005 require folks to get credit counseling from a federally approved agency six months before they can take advantage of bankruptcy protection.