You often see the ads for credit counseling during the commercial breaks, and you might think
you are too far in debt to bother with such a service. However, if you take the time to discover
the benefits of having an independent counselor review your debt situation, you would be better
off for it. Debt counseling is not for people who debt situation is beyond repair. In that case
you make want to talk with a bankruptcy trustee. But if you have moderate debt, you may want to
take the time and visit one of these credit counselors in your local area.
Credit counselors act as a go-between you and your creditors. They negotiate with your creditors
to allow you reduce your monthly payments. Sometimes, depending on your situation, and how
you manage your credit, they could arrange to have some fees reduced or removed. But their
main task is working out a manageable repayment plan that both you and your creditors can live
with. Creditors do not like to accept reduced payments, but they much prefer to have a reduced
amount than to have you skip town owed the full amount of your debt. Your creditors will work
with the credit counseling agency to secure their money, and give you some breathing room.
However, once you decide to seek counseling for your debt, you would need to consider several
factors before deciding on the right credit counseling service. Pay attention to these four points as
you narrow your search for helpful advice:
- It is important the firm have qualified employees who have sufficient financial training to help you. They do not have to be accountants, but must have the basic education in credit counseling.
- Is the agency accredited? It takes money to have your firm accredited by most standard setting bodies, so some firms shy away from such accreditation. On the other hand, some firms hide their shady dealings behind the same standard setting bodies. And it is sometimes difficult to tell who is legitimate. So start with the accredited agencies, but check them out before you decide to choose one. However, keep in mind that many of the agencies listed are nonprofit bodies.
- The Fees that they charge. Any of the better credit counseling services will only charge their clients a small but reasonable monthly fee around $ 30 for the use of their services. However, you may find that some also charge an up-front fee around $ 50.
- Application to a Credit Counseling Service. When applying for the services for credit counseling the company should clearly state what their fees are, what are the services they provide, and how long it takes them to work on your application.
You should have these four points in your mind before you begin working with a reputable credit
counseling agency. Once the application phase is over, you should be well on your way to
managing your debt. This means, you can reduce the stress that comes with carrying a heavy debt load.