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Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
How
To Choose a Credit Counseling Agency
Credit
counseling agencies are a natural byproduct of a society
that heavily relies on revolving credit to finance
daily necessities, little luxuries, and big ticket items. Many
a time a consumer will feel backed into a financial corner
when the load of outstanding debts becomes too heavy that they
can no longer meet their financial obligations. As a matter
of fact, they may be looking for ways to either reorganize
the debt or consolidate it to lower overall monthly payments
and to get a handle on the outstanding amounts. For those who
do not even know where to start, a credit-counseling agency
is a wonderful place to begin.
These agencies specialize
in helping overextended consumers to understand their debts, their spending habits, and also
to find ways to change these spending habits in the future.
Working also as debt management companies, they will be able
to offer a consumer the opportunity to have all the debts consolidated
in a debt management plan. The goal of such a plan is to renegotiate
the overall amount of debt by getting creditors to lower their
monthly interest rates, perhaps even to reverse late charges,
and thereby helping a consumer to see a light at the end of
the tunnel and climb out of debt. While in theory this sounds
like a wonderful idea, there are some bad apples in the credit
counseling industry that are trying to squeeze the last penny
out of a worried consumer rather than truly help them with
their credit issues.
Here are some helpful hints on choosing a credit-counseling
agency that will have your best interest in mind:
If you are looking on the Internet for help with your credit,
beware the companies that only seem to want to offer the debt
management plan and do not seem to have any counseling available
first. Not every consumer is a good candidate for such a plan,
and it takes an experienced counselor to weed through the outstanding
debts to ascertain what kind of debts these are, what other
options the consumer may have, and what the ramifications of
a debt management plan would be.
Run the credit counseling agency through the better business
bureau database. If there are numerous complaints, or the overall
grade received is rather low, stay away from them! Where there
is smoke there is usually fire, and you do not want to do business
with a company that has a hard time keeping its promises to
other consumers.
Make sure the counseling organization has a real telephone
number and address. If all you ever get is an answering machine
and a post office box, the odds are good that you have found
a fly by night operation that may be here today, but not tomorrow.
Before signing on with a counseling agency, you should have
access to their agreement with you. Study it! Make sure you
understand what is expected from you, and what the company
offers in return. Find out what costs are involved, what counseling
you may expect, and if there is a cut off when services will
no longer be rendered.
While reading the contract, if
you find items that are just too good to be true, ask questions. For example, if the counseling
agency promises to fix your credit, find out what that means.
Your idea of fixing credit and theirs may be radically different!
You might envision your credit rating to go from poor to good,
while they may simply mean that they will ask your creditors
to re-age your delinquent credit accounts which may no longer
show them as past due, but which will not alter your overall
credit rating from poor to good!
Beware of agencies that promise to remove bad notations from
your credit file! Bankruptcies, liens, and repossessions will
stay on your file until you either deal with them, or they
drop off after ten years.
If you are asked to make contributions in lieu of payments,
find out exactly how much you are expected to pay. If services
will no longer be provided if you fail to make a voluntary
contribution, then it is not all that voluntary any more, is
it?
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SolveYourProblem.com
: 2007
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