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.

Credit Counseling Services – What Are They and How Will They Help You to Manage Your Debts?

The demand for credit counseling services is booming with the recent economic recession. Credit card debt has soared to a record of 1 trillion dollars. As the economy begins to regain strength credit counseling services are receiving more business from the many Americans that are still struggling.

These services may be capable of repairing your dept to some extent. Yet with the credit counseling services being a $7 Billion a year industry, how do you know if they are legitimate businesses or a scam?

With the increase in availability of credit cards, and the vast number of consumers that have taken to their use, it is not wonder that so many services have begun to appear. There are now over one thousand credit counseling services that service nearly 400,000 consumers. This problem will continue to escalate as new legislation has cause many major credit card providers to increase their interest rates.

These increased interest rates will make it more difficult, and possibly impossible, for the already struggling consumers to handle their credit card debt. As more and more people begin to struggle, the credit counseling services will begin to increase in popularity amongst consumers.

As more consumers begin to move towards declaring bankruptcy, credit providers will be forced to be more willing to negotiate, as the declaration of bankruptcy would leave them with nothing.

These companies are meant to thrive upon this new codependent relationship that the banks have with consumers. Without the banks willingness to negotiate, these companies would have no business.

These customers using the credit counseling services will normally go into business working with their own personal counselor. These counselors will not only work to negotiate terms with the banks but also to inform the customer of how better to avoid future problems.

Once the debtor has entered into one of these credit counseling services all of their previous bills are summed up into one monthly payment. This is then handled by the service and distributed out to the different creditors as needed.

However, during this time the debtor is effectively shut off from receiving anymore credit. This closed line of credit will be kept for the entirety of the program which can take roughly four to five years.

These services can provide many phenomenal benefits to struggling consumers, and can relieve much of the stress that is accompanied by debt trouble. However, even more stress can be created if you begin to deal with an illegitimate business.

With the recent increase in credit problems many start ups have been created in order to capitalize on the new emerging trends. These new companies were excellent advertisers in comparison to the already dominating Consumer Credit Counseling Services, but not all were as legitimate.

These companies are supposed to work with creditors to negotiate payment plans and reduce interest rates to help out those in debt.

Some of these illegitimate businesses would charge fees, to the tune of $3000 dollars, claiming that they would settle your debt.

Getting A Credit Counseling Service – 5 Most Important Questions To Ask

Credit counseling agencies are non-profits organizations that help heavy debtors to work their way out of debt. There are too many credit-counseling agencies in the market, while many are legitimate organizations that really want to help the debtors to solve their debt issue, there are scammers around who also call themselves credit counseling agencies, try to cheat your money and worsen your debt condition. If you are overwhelming with debt and looking for credit counseling service, then it is important for you to choose a legitimate credit counseling service. Here are 5 important questions to ask when you approach a credit counseling agency:

1. What services do you offer?

Most credit counseling agencies include services such as budget counseling, savings and debt management training. Try to look for an organization that offers a range of services so that you can get the counseling in all areas of personal finance that are necessary to help you effectively manage your money and resolve your debt issue. The counselor should first understand your entire financial situation before he/she propose a personalized plan to solve your money problems. Avoid organizations that keep selling their debt management plan as your only option before getting to understand in detail about your debt problem.

2. Are you licensed to offer your services in my state?

Most states required credit counseling agencies and the counselors to obtain license before they can offer their services in the states. Before you approach credit counseling agency, do some homework to understand the licensing requirements of a credit counseling services for your state. Do not accept credit counseling services that do not fulfill the requirements for your state.

3. Do you offer free counseling services?

If you can get it free, don’t pay for it. Most credit counseling agencies provide free counseling services to their clients, you just need to pay a reasonable fee if you agree to enroll into their proposed debt solutions such as debt management plan. Avoid getting services from credit counseling agencies that charge for “free” services.

4. Will I have a formal written agreement or contract with you?

Don’t enroll into a debt management plan (DMP) that does not have any written contract or agreement. Even there is an agreement for the proposed DMP, you must not sign the agreement in hurry, read all documents carefully to ensure all the terms and promises by the credit counselor are written correctly in the documents. If you are urged to act immediately, consider finding another credit counseling agency.

5. What are your fees? What are these fees for?

Get a detail price quote in writing on all fees involved and specifically ask whether the fees quoted cover all the necessary fees, this is to avoid any potential hidden cost charge by the agency after you have signup with their plan. If your current financial capability is not able to support the fees, try to negotiate with the agency to waive or reduce the fees. If the agency won’t help you to resolve the fees problem, look elsewhere for help.

Summary

You want to get a credit counseling service that can help to solve you in your debt problem. Hence, it is important you ask the right questions that can help you to identify the legitimate and responsiveness of a credit counseling service.