Credit Counseling - Can it really reduce debt of all consumers ??
With proper help you can
- Lower your monthly payments
- Reduce interest rates
- Waive late fees
- Eliminate collection calls
- Avoid bankruptcy
- Have only one monthly payment
- Become debt free
FREE counseling and analysis form
Toll Free
800-DEBT-913
800-DEBT-913
What is Credit Counseling?
Credit counseling is a professional counseling service that helps consumers in repaying their debts. It also educates the consumers about credit, budgeting, and financial management.How does it work?
Once you consult a credit counselor, he or she examines your overall financial status. Given below are the items that are taken into account while assessing your financial status:- Total debt amount
- Rates of interest on different loan accounts
- Minimum payments for credit cards
- Other financial obligations like child support, medical expenses, insurance premium, utility and many more
- Total monthly income
When should you go for credit counseling?
- If you have already missed a few payment dates and do not want to go through the hassles of negotiating with your creditors.
- In case you are anticipating a possible hardship in near future, then you might benefit from it.
- If you are current with your accounts but afraid of falling behind, then it is advisable that you see a counselor to find a suitable way out and protect your credit.
- If you are planning to file for bankruptcy. As the new bankruptcy law, 2005 has made it mandatory to undergo credit counseling session before filing bankruptcy.
How a credit counseling agency can help you in paying off your debts?
The counselors usually have good contacts in the credit industry; thus, they can negotiate better repayment terms with creditors. They even negotiate with the creditors to lower the interest rates, waive past late fees and "re-age" your past due accounts to a current "paid-as-agreed" status.How much will it cost?
There are two types of credit counseling agencies: non-profit and the ones that work against a nominal fee. The fees charged are often based on your monthly payment, the typical fees structure include a start-up fee plus a monthly fee. According to the industry experts, the fees charged should not be more than 20% of your monthly payment.Why would a credit counseling agency would work without a fee?
The counseling agencies usually receive a particular portion of the fund paid to the creditor, known as Fair Share. For example, 16 PLUS - WFNNB offers Fair Share of 5% on each transaction.Word of caution: There are few agencies that pretend to be non-profit, but in reality they use your first payment to cover their fees, or will deduct a flat amount from your monthly payment. Be wary of such companies. Even if the credit counseling agency says it's non-profit, that doesn't mean the services provided to you are free. Thus, prior to zeroing on any counselor, it is important to ask a few important questions.
Will it affect your score?
A comment stating that you are making payments for an account through a credit-counseling agency will appear on your credit report. The comment stays on your report until the account is paid in full. However, such a comment won't hurt your credit score as Fair Isaac Corp. since 1999 has ignored any credit-counseling information while calculating a consumer's credit score.Will the counseling program affect your ability to obtain new credit?
It depends on the creditors. Some creditors may view a borrower who is enrolled in a credit counseling program as too risky to merit approval of a new loan. Whereas, other creditors might view it as a positive step, that the borrower has taken responsibility of his/her own unmanaged finances and is serious about paying off the debts.What is the time taken to complete the program?
It is pretty difficult to anticipate how long it will take to get you out of debt. Several factors work behind it. Let's consider an example: if you pay $ 500 per month it will take 10 months to repay a $ 5000 loan in full. But, if you decide to pay $ 250 per month, the repayment period is likely to be doubled. Usually counselors design the program in such a way that you can become debt free within 2 to 4 years. Try the debt to income ratio calculator and get a rough idea on how long it can take for you to get debt free. For any query you can ask our community, a group of people with similar experiences.Why would the creditors agree to the repayment plan proposed by your credit counselor?
Most of the mainstream creditors prefer to work with consumer credit counseling agencies because it saves them a lot of money and energy. Creditors get a fair portion of their funds back through credit counseling services, which they won't get back if the consumer is forced to file bankruptcy.What should you do if you discover an error with the bills paid through your counselor?
In such a scenario, you must report the company to your local consumer protection agency or state attorney general's office. You can also file a complaint against the company at the Better Business Bureau. You must also contact your creditors and explain to them the reason for the discrepancies in the payment of the bills.
|
#1
07-14-2008, 09:21 AM
|
|
Join Date: May 2008
Posts: 3
Credits: 121
|
|
Sub:
Credit Counseling - Can it really reduce debt of all consumers ??
credit counseling is a very common form of online debt consolidation. It is also known as credit card consolidation. Currently rising interest rates and mounting credit card debt is prompting many consumers to look for ways to consolidate their credit card bills and so credit card counseling services has gained recognition among people.
Some people have been wondering what credit counseling is and how it can work for you in terms of getting yourself out of credit card debt. Credit counseling itself is a creation that was funded by the credit card industry believe it or not. They did this because they needed to come up with a solid way of getting paid by the people that were unable to pay down all of their credit card debt. Rather than the hassle of sending lawyers and collection agencies to people in order to get their money, they invented this system for people to be able to still get them paid. At the end they got all of what they owed from people plus the interest of the payments. It was something that had actually made them a lot more money then they could believe. deleted NO ADVERTISING! Frogpatch as a credit counseling company will attempt to get you a lower interest rate on your credit cards in order to coax you into paying them down. More often, it will have a relationship already with major creditors. You can usually expect to pay back your entire balance on the debt that you owe and anywhere between six and twelve percent of the interest. This is about half of what your normal interest would be and will end up paying down all of your debt anywhere between two years and eight years from the point of which you began it. You would be paying off everything you owe plus the interest that has built up on it over a period of time. This is an easy way of making only a single payment each month and having to pay back everything you owe to the companies. The results of consolidation are positive simply because it's easier to manage and allow you pay less than what you owe and consequently improve your credit score. Most likely there are two ways to consolidate your credit card debts. One of the way is Credit Card Consolidation Loan, which is a type of unsecured personal loan. Credit Card debt consolidation loan shortly means one loan for all your credit card debts. When you have several credit card debts, you can consolidate it into one lower, fixed rate loan. You make a single lump sum payment each month to your credit counselor and he in turn will pay off to your current creditors. Credit card consolidation loan can be further categorised as Student and Military Credit Card debt consolidation loans. Consolidating student credit card debt can be of great help to students for the reason that instead of having to send out four monthly payments to four different lenders on four different dates, you send one payment, to one lender on one date by taking one lower interest rate loan that would allow you only one monthly payment. And another is Military credit consolidation loan program which is especially for the personnels in army. It allows them to make monthly payments in a timely manner and so as to take advantage of having an easy budget. Another way is credit card debt settlement plan wherein a debt settlement company would negotiate a lower lump sum payment to pay to your Credit Card Companies i.e. your creditors off and as a result you end up paying fifty percent or even sometimes lower, of your outstanding balance to them. consumer credit counseling program and christian credit counseling are parts of credit counseling. In a Consumer credit counseling plan a credit counselor will discuss your financial situation with you. All consumer credit counselors ask for three basic items for your initial consultation. Firstly, a list of all of your current bills, secondly recent statements from your creditors and lastly check stub or other form of income verification. They help you sort out your financial woes long term and not just to offer you a quick fix to the problem. They will discuss your overall financial picture including where you are now financially and will also analyze how it is you got to this point. Many of us are influenced by words that remind us of security, safety, peace, etc. One of these words is Christian. It is easy to insert this term into the title of a company that specializes in debt solution, debt consolidation, credit counseling, or debt elimination programs. But the services provided are the same as its meaning suggest. It means you will feel safe and secured after applying for this program. Proving that a credit counseling company is Christian is very difficult. In short, Christian Credit Counseling works the same way as a debt consolidation company. You need to give records of all of your debts, supply your income records and then they contact your creditors and make arrangements for regular reduced payments, using the money from your wages, until the debt is paid off. There are also non profit credit counseling agencies. But there's nothing like non-profit. Both profit and non profit credit counseling agency’s work in the same way. They both spend money on advertising and salaries such as for their employees so it still very much is a business to both of them. Non profit in itself does not mean they are honest and good people either. So for either profit or non-profit agency you need to take a look at the better business bureau records for the company; you should be able to get a decent indication on whether or not the company is a good one. Both the companies charge you set of fees. Some credit counseling companies make mandatory to have a very steady income to pay off your normal monthly bills. So it’s advisable to check terms and conditions when you are dealing with any other credit counseling agency whether profit or non-profit. 
|
|
#2
07-14-2008, 09:27 AM
|
|
Sub:
Advertising no matter how subtle is not permitted. Do not try to slip that in again!
__________________
A Safe and Legal Way to Boost Your Credit Score by 200 Points in 57 Days. A BBB Company with a flawless record! Free Seven Day Mini Course! http://tinyurl.com/57daych Travel should not cost you money! It should earn you money! www.tinyurl.com/pgntrvl Escape the Payday Loan Trap http://tinyurl.com/pdltrap
|
|
#3
07-14-2008, 10:57 AM
|
|
Sub:
OP you are acting like a spammer and will desist from advertising or admin will remove you for good.
__________________
Cajunbulldog Keeping an eye out for consumers. http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#809 http://www.ftc.gov/os/statutes/fcrajump.shtm http://www.debtconsolidationcare.com.../about216.html Use this letter to protect your rights under the FDCPA myfairdebt.com & myfaircredit.com-Good source of case law in forums.
|
Linear Mode
