Credit and Debt Counseling

Credit and debt counselors advice people on how to improve their credit and economic situations. Debt counselors help people to understand where their money is going, how they are being charged with interest, and the best ways to knock out their bills. They will sometimes mediate with debtors to help reduce what a person owes. Credit counselors will look at payment histories, credit scores and reports, and overall debt to help a person make a plan to raise their credit scores.

Asked in Credit and Debt Counseling, Personal Finance, Debt and Bankruptcy, Debt Consolidation

Should you get credit counseling?

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If you are living paycheck to paycheck, worried about debt collectors, or can't seem to develop a workable budget, you may be considering a consumer credit counseling service. Your creditors may be willing to accept reduced payments if you enter a debt repayment plan with a reputable credit counseling service. Choosing whether or not to use one of these services and choosing which agency to work with can be difficult, so here are some tips on how to approach this decision. If you want to work with a credit counseling agency, interview several. Here are some good questions to ask: What services do you offer? Do you have educational materials? If so, will you send them to me? Are they free? Can I access them on the Internet? In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future? What are your fees? Do I have to pay anything before you can help me? Are there monthly fees? What's the basis for the fees? What is the source of your funding? Will I have a formal written agreement or contract with you? How soon can you take my case? Who regulates, oversees and/or licenses your agency? Is your agency audited? Will I work with one counselor or several? What are the qualifications of your counselors? Are they accredited or certified? If not, how are they trained? What assurance do I have that information about me (including my address and phone number) will be kept confidential? How much do I have to owe to use your services? How do you determine the amount of my payment? What happens if this is more than I can afford? How does your debt repayment plan work? How will I know my creditors have received payments? Is client money put in a separate account from operating funds? How often can I get status reports on my accounts? Can I get access to my accounts online or by phone? Can you get my creditors to lower or eliminate interest and finance charges or waive late fees? Is a debt repayment plan my only option? What if I can't maintain the agreed-upon plan? What debts will be excluded from the debt repayment plan? Will you help me plan for payment of these debts? Who will help me if I have problems with my accounts or creditors? How secure is the information I provide to you? You might wish to check with your state Attorney General, local consumer protection agency, and the Better Business Bureau to find out if consumers have filed complaints about the provider you are considering. Any reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If not, consider that a red flag and go elsewhere for help. Be careful before choosing Consumer Credit Counseling. Research this option using the internet and verify everything. CCC companies have gotten a very bad name in recent years based on changes in their industry. Credit counseling was originally started by the credit card companies themselves as an alternative means for collecting their debt from consumers. These companies typically never reduce the amount owed to their participants, sometimes renegotiating late fees and over-the-limit charges. This is the "savings" that they advertise. According to NationalDebtRelief, "the success rate of debt management plans is about 20% to 26%." They also go on to recommend considering debt consolidation loans and Chapter 7 bankruptcies, citing their "better completion rates." It is also important to note that when filing for bankruptcy, whether Chapter 7 or Chapter 13, that you are required to provide a certificate showing that you received credit counseling from an agency approved by the U.S. Trustee's office within the 180-day period before you file for bankruptcy.
Asked in Credit and Debt Counseling

What education or training do you need to become a credit or debt counselor?

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You would need to have some accounting or credit training. You would probably need to have an associates degree in business or finance. The company could train the right person so you may not need any prior education or experience.
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Is it true that using a debt counselor will have a negative impact on your credit?

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No it does not have a negative impact on your credit as they are there to help you out to manage your debts and increase you credit. They just give an advice on planning your debts then it is upto you how you make it.. Answer I went through consumer credit counciling,It was & is free in Mo. & that is the name. If you want there help it takes two You must do what they say including cutting all you credi cards up. you will not be able to get a loan with out their ok in advace.BUT the great news is after you get your debt paid off usealy at reduced rates.you then have an eduction that is worthits weight in gold. there is no obligation on your part , SO contact them there should be something like this in evry area of the country check the inter net . STAY AWAY FROM ANY ONE THAT WANTS TO CHARGE YOU MONEY. The above IS FREE Answer Using the services of a "debt counselor", consumer credit counseling, and debt consolidation programs absolutely have a negative impact on your credit. Such plans/programs are notated on your credit report even when the accounts included are paid as agreed. They indicate that you needed professional assistance to manage your debt. Credit assessment, rating and scores are all about RISK. Needing professional assistance indicates a significant amount of risk.
Asked in Business Writing, Credit and Debt Counseling

Where can you get a sample of a hardship letter for medical bills?

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If you have medical bills you can't afford to pay, you should write hardship letter to the hospital and/or your medical provider, and do it before you are sent to collection agency. Trying to explain the situation shows your good faith and desire to satisfy your bills. Hospitals and medical professionals are very likely to meet you half way, instead of trying to collect through the third party. So writing a short and right to the point medical bills hardship letter is certainly worth while, as long as you intend to pay. Send it by registered mail with return receipt required. Here is the sample. Date {MM/DD/YYYY} Hospital/Provider Hospital/Provider Billing Department address Your name Your address Account # RE: Date(s) in the hospital or of medical procedure {MM/DD/YYYY} Dear Sir or Madam, This is the medical hardship letter to state my inability to pay the bill for amount of $$$$ for the procedure performed on the {MM/DD/YYYY} (or my hospital stay from {MM/DD/YYYY} to {MM/DD/YYYY}). Please understand that this is neither a refusal to pay nor a dispute of the charges, but simply an explanation of my financial situation. My current income is just enough to cover basic necessities, and by paying your charges at once as required, would lead to a serious financial hardship for my family and myself. With that said, I want to pay for the medical services performed and my stay in the hospital. I would like to propose paying you the entire amount in monthly installments for the next 12 months (or you can suggest to pay 50% of the bill at once). I am truly hoping for your favorable response. Thank You for your understanding Your signature Your printed name
Asked in Credit and Debt Counseling

If you use a debt counseling service that consolidates your debt for you can you still make payments to your credit card company directly?

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When you use a debt counseling service that consolidates your debt for you, you are supposed to make one monthly payment to the credit counseling company instead of paying your credit card companies individually. However, if you come into some extra money and you want to make an extra payment directly to the credit card company, you may need to do some research. Once you sign a contract with your credit counseling company you'll need to abide by the terms of that agreement. Many credit counseling companies want all payments made to your credit cards to go through them. This will mean that you will need to send the extra money to the credit counseling service rather than directly to your credit card company. Another thing to think about is if you do send the funds to the credit counseling service, you might not have any control over which credit card they apply it to. You can tell them where you would like it applied, but that doesn't necessarily mean that's where they have to apply it.
Asked in Credit and Debt Counseling

What's the difference between a debt consolidation loan and debt counseling services?

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== == == == * A debt consolidation loan is a loan you get to pay off multiple loans or lines of credit. Debt consolidation loans are useful when you have varying amounts of debt on varying items (car loan, credit cards, medical bills, etc.). The idea is to get a loan at a fixed and low interest rate to pay off your varying debts. It typically lessens the total amount of money you end up paying. Credit counseling, also known as as debt management plan is another solution to handle debt that is spiraling out of control. Reputable credit counselors actually offer a wide range of solutions based on your specific situation. They'll review your finances, advise you about budgeting, and devise a program to help you get out of debt. * When a lender loans money to payoff all your credit cards and other debt, you have one monthly bill which is paid the lender. Often these loans do not have a lower APR and can be as high as APR(Annual Percentage Rate)'s of 24 percent. Even if you do get a decent APR you are still in debt. The big mistake is people give up secured debt for unsecured debt. Most Debt Consolidation Loans are given in the form of home equity loans which means if you do not pay you lose your home. * A second way that credit counseling can be a "good" term is to actually mean counseling. Many credit reduction companies and private financial institutions offer credit counseling as a type of financial planning. Counseling can help figure out how much debt is owed and how to control debt in the future.
Asked in Credit and Debt Counseling

What is needed in order to sign up for credit counseling services?

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What is needed in regards to signing up for credit counseling services will depend on which credit counseling company you decide to go with. Each company will have their own specific requirements, although there are some standards that almost all companies will ask for. The first thing you
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Will using a credit counselor help or hurt your credit?

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Answer Once you employ the use of a credit counselor a notation to that effect is made on your credit score. This, in itself, is a neutral notation and does not affect your credit score. It is the credit score which determines your credit worthiness but there are some creditors who will view this notation in a negative aspect. Most creditors will look only at the credit scores, but whether credit counseling helps or hurts your credit depends on how an individual creditor views credit counseling. Answer Indirectly. A credit counselor will work with you to help you reduce your debt and manage your financial life more effectively. Beware fly-by-night operations that scam people out of money under the guise of financial management. Reducing your debt and maintaining financial control over your life will help your credit in the long run.
Asked in Credit and Debt Counseling

Will credit counseling show up on a credit report?

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Answer When you are undergoing credit counseling, some of your creditors may contact the credit bureaus and put a notation on your credit card report signifying you are going through credit counseling. This notation is neutral and does not affect your credit score in any way. Once you finish the credit counseling, this notation is removed from your credit report. Answer yes it does show up. also just a pointer when you go to geta loan and a banker or a loan officer looks at it it is a very bad thing to have it on your credit report. we lokk at it and see it as you can not mannage money well so why would we want to loan you money.
Asked in Credit and Debt Counseling

If you use credit card counseling services to pay off debt how does this affect your credit?

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Typically when you use credit counseling services there has been damage done to your credit already. It affects your credit, but not as bad as if you are paying late all the time and struggling. Typically they help you settle your accounts and sometimes this "settling" l;owers your credit score. Answer 2: Problems that cause you to seek credit card counseling will definitely lower your credit score. But the fact that you used a credit card counselor to help you out of your debt should not negatively affect your credit score, if your credit company is following the Fair Isaac & Company. Fair Isaac is the company who developed the first scoring model which is used by most creditors today. There are companies who follow a different model and as unfair as it sounds, it can affect your credit score. For more information, check the link below.
Asked in Credit and Debt Counseling

Can you file the balance that you owe the bank after your car has been auctioned on your Christian Credit counseling?

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read the info from CC that you should have to see if "def. bal." is covered. OR call CC.
Asked in Credit and Debt Counseling

What will happen if you drop out of a consumer credit counseling program?

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I dropped out of consumer credit counseling years ago, and it was not a good experience. The credit cards that I had would not re-open my accounts and my credit report had a negative comment regarding "Consumer Credit Counselors", which is a red flag to any creditor that you needed assistance with maintaining your finances. Also, depending upon who your creditors are they will cancel the arrangements made with consumer credit counselors and go back to the original terms and agreement of your contract, along with any previous balances you had already occurred prior to signing up with a counseling service. My suggestion is if you start counseling, finish counseling.
Asked in Credit and Debt Counseling

If you come into a small inheritance enough to pay off your debts is it better to pay them now or over time with a credit counselor company?

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It would be better to pay off all debts as soon as possible! As said in the above answer, it makes more sense to go ahead and pay the debts, especially if you are paying interest or fees on these debts. But if for some reason you decide not to do that, pay them on your own because a credit counseling company will most likely want to charge fees for their services. Put the small inheritance into savings, so that next time around you have some cushion against sudden expenses. There are some decent CDs or savings accounts that pay interest. Then, work hard and scrimp for awhile to pay off those debts. If you need help figuring out how to manage the debts, a non-profit credit counseling company can help. There are also some good money management chatrooms that can help you become more savvy. I like the one on MSN Money.
Asked in Credit and Debt Counseling

How much is a certificate from a debt counselor for bankruptcy?

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My bankruptcy clients have seen prices ranging from $30-$50. You should check with the local United States Trustee's office for a list of credit counseling agency that are approved in your judicial district.
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Can you sue a credit counseling agency after you file bankruptcy?

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The US constitution permits citizens to sue anyone at any time for anything. Whether the suit will be heard is another matter. Expanding on the above...presumably you feel they didn't do what they promised. The written agreement between you and them would be the most important thing to prove your case...and I'd suspect it is written to protect them well...including things like it supercedes verbal representations and may even require you to submit to arbitration before going to court.
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How do you break contract with family credit counseling corporation?

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Technically speaking there is no "Contract", its more of an agreement. I believe they may have gone under and sold their accounts to "American Debt Counseling, Inc." but from what I've read they have the same ripoff practices. The way to break your contract is simply fax them a written request to stop your automatic payments.
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How do you start an honest and reliable debt consolidation and counseling company?

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If really serious, you would learn an enourmous amount of info as to how collection agencies work by working for one as a debt collector. If not, first step would be to talk to an Attorney; you would probaly have to retain one in some manner anyway. Look at your states regs. Looking into the licence requirements will give you a start. I would assume you will have to be bonded and have a net worth of x amount of dollars. Collection agencies work in that manner. Basically, fifty states means fifty different laws and regs. to be abreast on. That means training for employees and employees who are capable of dealing with people who are not happy; must be thick-skinned.
Asked in Credit and Debt Counseling

If a chapter 13 case is dismissed for failure to obtain credit counseling prior to filing how soon can you refile?

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If the case was dismissed without prejudice, you can refile at almost anytime after you get the credit counseling. However, you should exercise extreme caution when refiling the bankruptcy and you should consult an attorney before doing so. Under the new laws, there are harsher restrictions on refiling bankruptcy to prevent "serial" filings. A serial filier is someone who files case after case to avoid eviction or foreclosure. Failing to file the Certificate of Credit Counseling can be sufficient grounds to find that the first bankruptcy was not filed on good faith and could result in an early termination of the automatic stay. If you refie, it may be necessary to file a motion to extend the automatic stay. Therefore, it is very important to see a qualified bankruptcy attorney about your situation.
Asked in Credit and Debt Counseling

How do you decide between a 125 no equity loan or a debt counseling agency to consolidate your huge credit card debt?

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Keep in mind the 125 loan will probaly have high interest or some other means of increasing the payment in the future. The lender wants to be covered for their risk. Talk to a banker about the loan and an Attorney about the debt couseling agencies. That should give you your answer. Check out either company you decide to go with by calling the BBB of your state.
Asked in Credit and Debt Counseling

What happens if you are in a credit counseling program and you cannot continue with payments due to slow job?

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It would be best to meet with the person handling your account explain the problem and have the payment plan restructured.
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Credit card counseling?

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form_title=Obtain Credit Counseling form_header=This type of counseling can help you raise your bad credit. What do you expect out of this service?=_ Describe your current levels of debt:=_ What types of purchases are you looking to make in the future?=_
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Can you use a credit counseling service to pay the deficiency balance in a repo in nc?

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I was a Certified Credit Counselor in the state of North Carolina, and the answer to your question is no. The only accounts that a credit counseling organization will accept are revolving accounts (credit cards), payday loans, utility debts, and medical debts. Repossessions will have to be negotiated between you and the collection agency or lender that has this account.
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Could you make payments to a debt collector through a consumer counseling agency like Debt Free?

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You could, but remember that DEBT FREE can not do a SINGLE THING FOR YOU that you can't do yourself!!!!