Credit Counseling
Many universities, military bases, credit unions and housing authorities operate nonprofit financial counseling programs. Some charge a fee for their services. Creditors may be willing to accept reduced payments if you are working with a reputable program to create a debt repayment plan. For unsecured credit amounts that total less than $7,500, Credit Counseling may be worth considering as a way to reduce the interest rate percentages being charged.
However, credit counseling organizations have faced recent scrutiny because of their misuse of their "nonprofit" status. Because an organization says it is a "non profit," there is no guarantee that the services provided are free, affordable, needed or helpful. In fact, some credit counseling organizations charge high hidden fees, or urge consumers to make voluntary contributions that can actually cause more debt.
Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
Be wary of credit counseling organizations that:
- Charge high up-front or large monthly fees for enrolling in their program.
- Pressure you to make "voluntary contributions," which can be another name for fees.
- Refuse to send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers, and balances.
- Try to enroll you in a debt management plan (DMP) without spending time reviewing and understanding your specific financial situation.
- Offer to enroll you in a DMP without teaching you budgeting and money management skills.
- Demand that you make payments into a DMP before your creditors have accepted you into the program.
Call us today at 888-645-8668 to receive free information on alternatives. You can begin to regain control of your life right now!
