free credit counseling service
Free Credit Counseling Services and does Credit Counseling Cost More Than Debt Settlement?
Free credit counseling services exist to aid consumers in their time of need, when they are overwhelmed and struggling with debt. The loss of a job, medical expenses and other hardships can cause a ripple effect in a person’s life that impacts everything, including their ability to pay their bills on time. You are not alone, there are programs out there that fit a variety of budgets, debt amounts, financial needs and more. Get Online Debt Relief Now! Click Here
Media personalities often praise credit counseling organizations for their non-profit status while criticizing debt settlement companies for charging fees for their professional services. What many consumers do not realize is that consumer credit counseling agencies collect the same (and often more) fees from their clients than debt settlement companies. The difference between the two is that one collects those fees directly from consumers while the other collects them as commissions from the creditors. However, the fees come from consumers’ pockets regardless.
Consumer Credit Counseling Fees
Consumer credit counseling services assist indebted consumers by helping them develop a budget and repayment plan. The repayment plan requires consumers to send in one payment each month, which the service distributes to the multiple creditors in each debt management plan. The service will often secure lower interest rates on their client’s credit card accounts to help ease repayment.
Some consumer credit counselors may take a setup fee or a monthly donation directly from consumers. However, the bulk of their funding comes from creditors through what is known as “fair share” donations. These “fair share” donations come out of the monthly payments the service collects from consumers and usually amount to about 15 percent (sometimes less) of what the service collects. So, if a consumer is sending in $1000 per month to the service, the service may collect $150 per month in commission-like donations from creditors on the backend. Essentially, the consumer is paying for the service; it’s just arranged in a way to help maintain non-profit status so the service and the creditors benefit from the tax breaks associated with this non-profit status.
Debt Settlement Fees
Debt settlement services assist indebted consumers by helping them develop a budget and a savings plan that involves consumers depositing funds into a third-party savings account each month. These funds are left alone to accumulate until there is enough to negotiate a settlement with a creditor. Because consumers who are eligible for debt settlement are experiencing a financial hardship and are already behind or about to fall behind on their credit card bills , they use what little money they have available to save up for settlements. Once enough funds are available and a creditor agrees to partially cancel a debt (for example, a creditor accepts $5,000 to fully settle a $10,000 balance), the consumer starts saving up for the next settlement until all eligible debts are settled.
Debt settlement companies are somewhat less standardized, partly because the industry is newer than the credit counseling industry and partly because creditors do not have the control over debt settlement that they enjoy over credit counseling. However, growth in the industry and industry trade groups are helping standardize much of the industry. Regardless, it’s not uncommon for debt settlement companies to charge a setup fee and a monthly service fee. Many companies typically charge around 15 percent of the enrolled debt amount, which they break up into monthly installments over the life of the program. If 15 percent sounds familiar, it’s because that’s how much of each payment credit counseling services often receive as commission-like “fair share” donations from creditors.
So, what’s the difference?
Consumer credit counseling services help consumer repay 100 percent of the debt owed plus interest, although at a reduced percentage. The service typically earns 15 percent (sometimes less) of what they are able to collect for creditors. So, if a service is able to collect $10,000 from a client, the creditor may reward them with a $1,500 donation. The client pays the full $10,000.
Debt settlement services help consumers negotiate reductions in the amount owed in exchange for lump-sum settlements. Debt settlement services are more upfront about the fact that they earn fees for the services they provide and, instead of filtering these fees through creditors on the backend, debt settlement services collects fees openly from consumers. However, if a client settles a $10,000 debt for $5,000, the $1,500 in fees paid to the debt settlement company just saved them $3,500 over what they would have paid through credit counseling services. Not bad, even for this simplified example.
As far as consumers go, a consumer who cannot afford to repay all unsecured debts but who is also looking to avoid bankruptcy is often better served by a debt settlement service. Unfortunately, this is the situation for a growing number of consumers as unemployment and foreclosures hit record levels. Debt settlement fills the gap between credit counseling services that require full debt repayment and bankruptcy, which may cancel all debt.
How to choose?
Do the math. If you can afford to fully repay your debts and you just need a little help organizing repayments and lowering ultra-high interest rates, then you may want to look into consumer credit counseling services. However, be sure to only approach those agencies approved by the U.S. Trustee Program at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm. If you are terribly worried about your credit score, then this route may be best for you.
If you do the math and discover that full repayment isn’t feasible, but you believe you can partially repay your debts, then you may want to look into debt settlement services. However, be sure to pursue companies that belong to industry groups, such as the U.S. Organization for Bankruptcy Alternatives (USOBA) or The Association of Settlement Companies (TASC) because membership in these groups demonstrates a company’s adoption of certain consumer-friendly standards. You should be aware that the debt settlement process can be more temporarily damaging to your credit score than consumer credit counseling’s debt management plans (neither option is as damaging to credit as bankruptcy). But, that should only matter if you are looking to take out more loans — something that shouldn’t concern someone struggling to get out of debt.
If you find that you can’t even repay half of your debts, then you may want to speak with a bankruptcy attorney about your options. Bankruptcy has the greatest negative impact on credit, but regaining the ability to pay for food and the roof over your head will likely out-weight credit concerns if your are contemplating bankruptcy.
Can’t I negotiate my own settlements?
You can negotiate your own settlements. There is no law requiring consumers to hire debt settlement companies to settle your debts. However, many consumers find the headache of developing the plan, setting aside funds and dealing with creditors more stress than they care to manage. The know-how of debt settlement is also a factor for many consumers. Negotiating settlements is a delicate matter, and doing so without understanding the ins-and-outs of the process can sabotage efforts. However, there are do-it-yourself debt settlement kits available that show consumers what they need to know to successfully negotiate their own settlements directly with their creditors. The kits are typically inexpensive and can save you thousands of dollars you would have otherwise paid in debt settlement service fees.
For Credit Card Debt Elimination, You Can Use A Debt Reduction/Negotiation Plan
It is a good option to use a debt reduction or debt elimination company to eliminate your credit card debt.
The methods that these companies uses provides you with greater savings than traditional non profit debt consolidation programs. This is because instead of negotiating only interest rates, the company negotiates reductions in the balances owed. It is not uncommon for small businesses or consumers to save 50 to 70% on their debts. And, most people who enter this program are free from their debts within a relatively short period of time.
If you feel that this program may help you, we recommend that you get a free and expert debt elimination plan.
Author: John Janney
Article Source: http://EzineArticles.com/?expert=John_Janney
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Free Credit Counseling Services and Secured Debt Credit Counseling
Free credit counseling services offer consumers a way to dealing with their overwhelming debt and finding a path to a more secure financial future. There are many variations of debt consolidation and settlement, Get Online Debt Relief Now! Click Here. Secured debt consolidation is one way for consumers to eliminate debt, if you have more questions discuss your questions or concerns with a financial planning professional. Debt Elimination is possible in as little as 12-30 months!
Secured debt credit counseling focuses on settlement of secured debt, which is an excellent option to get rid of financial difficulties such as bankruptcy. Secured debt credit counselors focus on keeping the credit level low within manageable limits. They provide advice on money management, debt management, and debt consolidation. Secured debt credit counseling service, a debt reduction agency, woks with the creditor to reduce interest rates and this enables the debtor to be free of debt easily.
Secured debt relief agencies provide services to the debtors in paying off their secured debt through credit counseling programs and they mainly work on credit card management. Secured debt relief counseling services would include a team of knowledgeable, experienced, and friendly professionals dedicated to work with debtors to completely eliminate debtor?s credit card debts. The representatives of these organizations will negotiate with the creditors on behalf of the debtors. These companies provide the following services to their debtors: reduce the debtor?s interest rates, eliminate late fees and over-limit fees, stop harassing phone calls, improve debtor?s credit rating, etc. They help to consolidate all debts into one monthly payment payable to the credit counselors. These credit counselors will distribute the consolidated amount to the creditors.
Secured debt also includes mortgage and auto loan. If the debtor fails to pay his/her debt, the lender will take back the collateral security he/she has provided for the same debt. Secured debt credit counseling services contact these lenders on the debtor?s behalf and work out a plan for the debtor to pay his/her arrears to avoid foreclosure.
While selecting a secured debt credit counseling service provider, the following factors should be kept in mind: How the company derives its income? What is the fee required to pay for credit counseling process? How much time will one need to discuss a problem with a credit counselor? How much training do the credit counselors have? and Is the company a licensed one or not? Credit counselors work for the benefit of the creditors and they also would ensure that the debtor pays the interest amount.
Author: Jimmy Sturo
Article Source: http://EzineArticles.com/?expert=Jimmy_Sturo
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Free Credit Counseling Services and Should Debts Be Settled Or Consolidated?
Free credit counseling services are available to consumers who are overwhelmed and struggling with debt. There are different options, however, and you will need to thoroughly investigate which method is best for you, your debt and your finances. Get Online Debt Relief Now! Click Here If you have more questions, you can talk to a financial planning professional.
For Credit Card Debt Elimination, You Can Use A Debt Reduction/Negotiation Plan
It is a good option to use a debt reduction or debt elimination company to eliminate your credit card debt.
The methods that these companies uses provides you with greater savings than traditional non profit debt consolidation programs. This is because instead of negotiating only interest rates, the company negotiates reductions in the balances owed. It is not uncommon for small businesses or consumers to save 50 to 70% on their debts. And, most people who enter this program are free from their debts within a relatively short period of time.
If you feel that this program may help you, we recommend that you get a free and expert debt elimination plan.
Many consumers make the mistake of thinking that debt consolidation and debt settlement is the same thing. But there are very distinct differences between these two programs. Debt consolidation is the process of combining multiple debts into one monthly payment. Typically administered by a credit counseling agency, a debt consolidation program can lower your interest rates, reduce your monthly payments and help you get out of debt faster. Debt settlement is the process of negotiating a settlement with your creditors. A debt settlement program can get your debts reduced for less than what you actually owe. Which program is right for you? It all depends on your individual financial situation.
Debt consolidation is designed to help consumers who are carrying heavy debt loads, have higher than normal interest rates and are in danger of falling behind on their bills.
To qualify for this program, you should be either be current or only a few months behind in your credit card debts. Your expenses, including the payment for the debt consolidation program, can’t be more than your income. A credit counselor will most likely to perform a budget analysis to ensure that this program is feasible. Once you’re on the program, you’ll send one payment to the credit counseling agency administering your account and they will pay your creditors.It typically takes anywhere from 36 to 60 months to complete a debt consolidation program. Because you’re paying back the debt in its entirety, debt consolidation typically doesn’t hurt your credit rating. In fact, many consumers find that they’re able to apply for a car or home loan after being on the program for one year.
Debt settlement is designed to help consumers settle debts that they’ve been previously delinquent on. If you’re more than 9 months behind in your credit card debts, you probably qualify for this program. A debt settlement company will review your debts and advise you how much they think you will need to get your accounts settled. If you don’t have the money already, you’ll have to start setting money aside and create a settlement fund. Once you have enough money saved to make a reasonable offer, they will contact each of your creditors and negotiate a settlement, which can be anywhere from 20% to 75% of the original balance.
Once all your creditors agree to the settlements, you will make the lump sum payments and the accounts are paid off. You can either do the settlements all at once or create a settlement cycle where you pay off each creditor as you get the funds. How it’s done all depends on your debt settlement company.It can typically take anywhere from 12 to 36 months to settle all your accounts. Debt settlement can have a negative effect on your credit rating for 5 to 7 years. You may have to pay income tax on the amount that you didn’t pay back to the creditors. While you’re saving the money to pay off your debts, your creditors could bring litigation against you to garnish your wages or place liens against you.
When Debt Settlement Crosses the Debt Consolidation Line
Unfortunately, because of the confusion between debt consolidation and debt settlement, some consumers that qualify for debt consolidation go the debt settlement route because they think it will save them money. And when you compare it dollars to dollars, debt settlement can be cheaper than debt consolidation. However, there are consequences that you need to consider before choosing debt settlement. Debt settlement can hurt your credit rating. Debt settlement can put you at risk of being sued by your creditors. With debt settlement, you may have to pay income tax on the amount you saved.If you’re not sure what program you should consider, talk with a credit counselor. Most credit counseling agencies are familiar with both programs as well as other financial options. They can review your personal financial situation and help you select which one is right for you.
Author: Kathryn Katz
Article Source: http://EzineArticles.com/?expert=Kathryn_Katz
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Free Credit Counseling Services
Free credit counseling services are growing due to the growing issue of credit card debt and struggling consumers in this tough economy. You can find a credit counseling business that can assist you with your credit counseling, debt consolidation or debt settlement needs. You are not alone, so stop the struggling and stress and find a solution to bring you some financial relief.
Free credit counseling is the act of providing help to those who struggle every day because of their economic problems. As the term suggests, the services are provided free of charge. Additionally, only experts on such issues will provide help to those who need it. This means that there are standard agencies, companies, and organizations that undertake each project.
If you feel that you are having problems managing your money, you should visit one of these non-profit organizations. They have assisted thousands of people before you, and thus they are very experienced and helpful. Although the roots of incorrect money management might be deep within your character, they will provide you with guidelines, advice, and facts that will help you to overcome such problems.
Moreover, in more critical situations where you are having trouble paying debt, these organizations can be very helpful. They will not only analyze and present your mistakes in an easy-to-conceive form, but they will also provide options that will help you improve your financial situation. Once again, don’t forget that these organizations have helped thousands of people who faced similar situations in the past. In certain cases, they will try to negotiate with your lenders in order to achieve lower interest rates for you. For free-of-charge organizations, this is not very common but rest assured that they will always do the best they can to help you.
Don’t forget that genuine, free help is something that you should never ignore. There are other people out there who would like to help you. Don’t be tricked into believing that you are all alone and that nobody understands your situation. Seek help, appreciate it when it is given, and try not to make the same mistakes again. It’s up to you and only you.
Author: Elizabeth Morgan
Article Source: http://EzineArticles.com/?expert=Elizabeth_Morgan
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Free Credit Counseling Services and a Guide to Understanding Credit Card Debt Counseling
Free credit counseling services and debt consolidation is available to consumers who are overwhelmed by their debt and are seriously concerned for the impact that their debt is having on their finances, their financial future, even their health and wellbeing can be impacted by the stress of debt.
Sometimes it can be easy to fall into credit card debt. There may be various reasons why we do this. It can be anything from job layoffs to hospitalizations or other types of emergencies. There are many ways to get out of such debt. You can stop using your bank cards and transfer your balances to one card, get a loan to pay off your bank card debt or seek help from a counseling agency. Before seeking help from those counseling service you need to understand the purpose of them and the services they provide. A credit debt counseling service is a group or organization of people that have counselors available to educate you and help you to get rid of their debt. They will also educate you with services to help you manage your current budget and remain debt free once your debts are paid off.
Steps to follow when choosing a credit card debt counseling agency
- Find out what services the counseling agency provides. Do they provide personalized debt consolidation and budget analysis? What other services do they provide?
- Track record- What is their reputation like? Ask around; do research on the company. Check the Better Business Bureau (BBB) to see if they have had any complaints. If they have how many of them have been resolved? You may also want to find out how many clients they have served with credit card debt and find out what their success rate has been.
- Experience- How long have they been in business? It is totally up to you however if you want to do business with a credit card debt counseling service that has not been in business very long.
- Education- What type of education have the counselors have? If you want help with your bank card debt it is wise to get help from some who has been educated themselves and has expertise in that area.
- Educational Resources- Will the credit card debt counseling service provide you with educational resources? Most of these counseling services have articles you can view online, pamphlets or classes and seminars that you can attend.
- Non-Profit or Not- Non-Profit Organizations will assist you with such kind of debt counseling services on a pro-bono (free) basis if you meet their qualifications. However there are some companies that charge a membership fee or upfront fee for credit card counseling services. ChristianCashAssistance.com is Confidential and Safe! Apply Now!
Armed with these questions and by doing your research, you will find the right credit counseling organization for your financial needs.
Author: Ilango Chokalingam
Article Source: http://EzineArticles.com/?expert=Ilango_Chokalingam
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Free Credit Counseling Services and Tips to Eliminate Credit Card Debt
Free credit counseling services are available if you need assistance with controlling your debt, debt management or debt consolidation and creating a healthier financial future for yourself and/or your family.
Want to eliminate credit card debt? Here are tips on how to get your finances back on track.
Free Debt Consolidation
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Free Credit Counseling Services and How a Credit Counseling Agency Can Help You to Eliminate Debts
Free Credit Counseling Services offers the following information on how a Credit Counseling Company may be able to assist you in dealing with your debt crisis. There are credit counseling services that are free, however, you should ensure that you thoroughly understand what any credit counselor offers you, regardless of the charges or lack of charges. Much of what a credit counseling agency offers you, you can also find online, including building a budget. Furthermore, nothing is stopping you from picking up the phone and calling each and every creditor and asking them to lower your rates or make some other effort to assist you in ensuring that you continue to make your payments.
The assistance and advice of the credit counseling agency can be a great help when you have debilitating debts and are fighting to take control of them. These agencies can be especially helpful when you are baffled about what to do next or lack self-confidence about your current ability to improve your financial situation on your own. The credit counseling agency may:
Assist you to set up a reasonable household budget.
Evaluate a household budget that you have already made to suggest necessary changes that will help you to get out of debt quickly, prevent the assets loss and so on.
Try to negotiate for lower payments with the creditors and put you into a helpful debt management plan.
Improve your skill to manage money and spending.
However, not all credit counseling agencies are reliable, so just take enough time to choose an agency that is reputable. That means working with a tax-exempt, nonprofit agency that charges you nothing or little for its financial services. I warn you against misidentifying a credit counseling agency for a debt settlement firm. If you are not cautious, it can be a serious mistake to make because a few debt settlement firms try to appear to the public as though they are credit counseling agencies; there are significant differences between the two.
The aim of debt settlement firms is to gain profit from financially stressed people – not to help them to fix their financial situation. They charge quite a lot for their financial services, and many of these firms don’t deliver on their advertised promises. People who employ debt settlement firms frequently end up in worse financial situation than they were before. When you owe too much debt relative to your current income, your most dependable option sometimes is the bankruptcy filing, especially if you are worried that one of the creditors is about to get hold of a precious asset that you own and do not want to lose. You may file the Chapter 7 liquidation bankruptcy, which cancels out most but not all of your bad debts, or the Chapter 13 for reorganization bankruptcy, which provides you 3 to 5 years to pay up what you currently owe and may also lower the amounts of some of your existing debts.
Author: Alan Buchanan
Article by Alan Buchanan of http://www.articlemonkeys.com.
Article Source: http://EzineArticles.com/?expert=Alan_Buchanan
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Free Credit Counseling Services
What is Credit Counseling and is it Right for Me?
Is Credit Counseling right for you?
Are you unable to make your monthly minimum payments on your credit cards?
Are you late paying any of your bills?
Have you tried to contact your creditors? Have those efforts brought no solution, or a solution that you still could not meet?
Are you being chased down by creditors and collection agencies? Avoiding phone calls, and deleting emails?
Do you have a steady, reliable income stream, but it is simply not enough to make those minimum monthly payments?
Can you reasonable restructure your debt and pay it off within about 2-5 years? If you are unable to meet that timeframe, you may be better off opting for bankruptcy.
What is Credit Counseling?
In a nutshell, credit counseling is a process through which consumers are offered education about how to deal with their debt, how to avoid accumulating additional debt and often involves negotiating with creditors to create a debt management plan. A DMP is a plan in which the consumer repays their debt on a repayment schedule. Often, DMPs include the ability to reduce payments, interest rates and fees. After the DMP is created, the creditors close the consumers’s credit accounts to cut off the consumer’s ability to continue to accumulate debt with that creditor.
How do DMPs help a consumer with overwhelming debt?
DMPs can be advantageous for the consumer struggling with debt as the credit counseling agency helps to consolidate the monthly payments of the debtor into one single payment. Typically this payment is less than the sum of each of the individual payments made each month by the consumer. In fact, many consumers find that after having tried to negotiate this on their own, it is only with a DMP that the same credit card bank will now accept this lower monthly payment.
DMPs are also helpful to the consumer as they may also achieve reduction in the interest rates they are charged by their creditors. Some consumers who are behind on credit card payments find themselves paying interest rates in the upper ranges of 20%, close to 30%! By joining a DMP, consumers can find themselves with annual percentage rates lowered to 10% or less, sometimes even eliminating the interest charges all together! This justifies the claims of many counseling agencies that their customers will be debt free in a short range of time as when the interest rates are dramatically lowered, the consumer is able to pay the debt off more quickly. Note that if you are simply looking to reduce your interest payments but you are current with your accounts, you probably should not look into a DMP as the creditors may carry that debt as "past due" in exchange for the lowered interest rate.
DMPs also help customers’ accounts that have become delinquent to a current status and help to impact their credit rating over time. This is also known as "curing" and account or "reaging" the account. The consumer making the payments dictated by the plan on a consistent basis will have these accounts reported to the credit bureaus as current. This, however, does not simply erase the past delinquencies. But with time and the continued payments with the debt management plan in place, the consumer will begin to rebuild a more positive credit history. Participation in a DMP does appear on a consumer’s credit report, and it can impact the consumer’s ability to obtain home or car loans. Some lenders will see this as a negative, as it can indicate that a consumer has not managed their debt well. On the other hand, other lenders can see it as a step in the right direction as it can also indicate that the consumer is taking care of their debt obligations and may be worth the lending risk.
Did you know that Credit Counseling is a requirement for filing for bankruptcy?
Credit counseling is now a requirement for any consumer filing for bankruptcy, as per the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. To meet this requirement, the consumer must complete a program with a nonprofit consumer counseling agency with at least one counseling session. Furthermore, they also have to complete a post-filing education credit counseling session before their debts are fully discharged.
What do I need to know about Credit Counseling Agencies and the negative statements about the industry?
Credit counseling has come under a lot of scrutiny lately with charges that consumers have paid hidden fees, excessively high fees, poor service and many other complaints. Many feel that the agencies take the sides of the creditors more often than the consumers. There are also charges that credit counseling agencies hire employees with little to no formal credit counseling training. So, you are putting your financial future in the hands of an employee who may have no more knowledge financial management than you do!
Beware of any agency that asks you to pay high upfront fees. They will claim to be "debt settlement" specialists and they tell consumers that they will negotiate their debt to "pennies on the dollar", we have all seen the ads and commercials. This is typically NOT a legitimate claim, and by the time they take your upfront fee, and the fees of thousands of others, they have enriched themselves, and preyed on consumers desperate for debt solutions.
While you may be desperate and want to hear postive, hopeful news and advice about your debt, do not fall prey to the con artists that make unrealistic promises. A legitimate credit counseling agency will tell you all of the details of how you and your credit will be impacted, even with the DMP. Make sure that they are accredited, and you can check that through the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.
Do your due diligence and you can find a reputable Credit Counseling agency that will help you understand the process realistically, charge appropriately, truly do what they say, and assist you in your Debt Management Plan. This can be a viable alternative to bankruptcy, and get your on a path of financial success and security and freedom from debt in the future.
Credit Counseling Corporations and Credit Counseling Resources will offer information and updates on how credit counseling may be the right fit for you, and how you can work with a reputable credit counseling agency to your advantage. While we do not offer credit counseling services, we will do everything possible to make sure that you can make an informed decision with the information that we provide to you. This also does not constitute legal or financial advice. If you are in need of legal or financial advice, it is always best to take the information you have gathered to an attorney or financial advisor for their input, interpretation and possible legal representation.
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Credit Counseling Resources
- Alternatives to Bankruptcy
- Credit Card Debt Consolidation Company
- Credit Counseling Business
- Credit Counseling Corp
- Credit Counseling Corporation
- Credit Counseling Debt Consolidation
- Credit Counseling Management
- Credit Counseling Organization
- Debt Bill
- Debt Consolidation Credit Card
- Debt Consolidation Home Loan
- Debt Consolidation Lead
- Debt Consolidation Settlement
- Debt Consolidation Settlement Info
- Debt Management Consolidation
- Debt Management Consolidation Info
- Finance Debt Consolidation
- How to Avoid Bankruptcy
- Loans for Debt Consolidation
- Personal Bankruptcy Alternative
- Refinancing Debt Consolidation
- Secured Debt Consolidation
- Small Business Debt Consolidation