Are you swimming in an ocean
of debt, fighting to keep your head above
the surface with no land or boats
insight? Is your debt like an ocean
current that's sweeping you farther and
farther out to the sea of bankruptcy?
If so, an accredited
Consumer Credit Counseling Agency can
help pull you into a life raft and give
you the oars to row yourself to the
shores of debt free living.
"Generally,
credit counseling organizations advise
consumers on managing money and debts as
well as developing a budget. Many may
offer free education materials and
worshops. Some credit counseling
organizations recommend and negotiate a
debt management plan (a debt
consolidation plan also referred to in
the industry as a DMP) for their
clients." (1)
One such Consumer Credit
Counseling organization advertises it can
help clients:
- Lower Payments
- Stop Collector Calls
- Debt Consolidation
- Lower Interest Rates
- Budget Counseling
- Bankruptcy
- and Rebuild Credit.
Through a personalized plan
customed-tailored just for you, most
non-profit consumer credit counseling
organizations can help you avoid
bankruptcy and pay off your debt without
borrowing additional money or extracting
large and unreasonable fees.
For many American
households, (who hold an average of
$8,000 to $10,000 in credit card debt), a
certified non profit CCC can be just the
solution as another firm claims in their
mission statement: "Our mission
is to eradicate the causes and
consequences of ineffective consumer debt
management through education, training
and programs delivered with the highest
level of customer service and dignity
free from all forms of
discrimination."
The most popular feature
that Consumer Credit Counselors offer is
the Debt Management Plan (DMP) which is
basically a debt consolidation agreement
made by the CCC between you and your
creditors of unsecured debt like credit
cards, student loans and medical bills.
With a DMP, the debtor
(that's you) deposits money with the CCC
which uses that money to pay your bills.
In many cases, the CCC has negotiated
lower interest rates, waived certain fees
and may also sweet talk your creditors
into "re-aging" your account
which means report past due amounts as
current.
Most
successful DMPs take 30 to 60
months to complete the agreed
upon repayment plan and the
credit counselor will usually
charge $40 to $60 per month to
manage this service. If they
charge a percentage of your debt
or more then that, it' probably a
disreputable credit counseling
agency.
How to
choose a credit counselor:
The credit
counseling industry has seen a
large influx of "bad
apples" trying to capitalize
on the growing consumer debt
trend in the United States. All
legitimate credit counselors are
non-profit organizations.
Unfortunately, many of the scam
credit counselors also claim they
are non profit. Here's how you
can choose which credit
counseling agency is legit and
can help you, according to the
Federal Trade Commission:
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Red
Flag tactics of
Disreputable Debt Negotiation companies: Continued
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