Australian Debt Consolidation » Credit Counselling

What to Ask a Credit Counseling Agency

admin — Fri, 30 Jul 2010 00:08:46 +0000

If you have decided to seek help from a credit counseling agency, never presume that all agencies have your best interests at heart. There are agencies that disguise themselves as â€œnon-profitâ€ credit counseling organizations, when in fact they are conducting illegal operations.

To avoid being ripped off, exercise caution and do your research. In this article, we present the questions that you should ask a credit counseling agency before hiring their service.

As a customer, donâ€™t be afraid to inquire about these issues. An ideal counseling agency would not hesitate to give you clear and straight answers. Consider the following questions:

* What are the credentials of the agency? Is it a licensed agency and one that is accredited by the government? Is it a member of a national credit organization?

* Where does the agency derive most of its income? Are the counselors paid based on the number of clients they enroll in the agencyâ€™s debt consolidation program? If the agencyâ€™s income is dependent on clientâ€™s fees, chances are you may be charged expensively for its services.

* Are the counselors certified and competent to give correct advice? See to it that all employees of the credit counseling agency are licensed and professional. What kind of training did they have? Do they have experience in handling different types of debt issues?

* How long does each counseling session last? A good agency should provide each client at least 90 minutes of counseling. During each session, the clientâ€™s problem should be thoroughly discussed to make sure that an appropriate solution can be taken.

* Will my confidentiality be assured? Since you will be providing a lot of personal information about your finances to your counselor, the agency must guarantee the confidentiality and safety of your privacy.

* What costs are involved and how much does the agency charge for its services? All the costs involved should be discussed right from the beginning. As a client, you should be clearly aware of all the fees youâ€™ll be paying in exchange for the companyâ€™s services. Nevertheless, bear in mind that you should not submit any payment until the services has been rendered. A legitimate credit counseling agency should not demand payment from you until your problem has been resolved.

* Can you access your account regularly? You should have the option to access your own account particularly if youâ€™re going to sign up for the agencyâ€™s debt consolidation program. This way, you can be assured that all your payments are properly submitted to your creditors.

* What exact services does the counseling agency provide? Watch out for agencies that insist on debt consolidation without first exploring other possible solutions to your debt problem. For instance, a counseling agency should not only help you get out of debt but should teach you how to manage your finances more effectively as well. Your counselor should help you work on a budget to make sure that you wonâ€™t have debt problems again.

Who Needs Consumer Credit Counseling?

admin — Tue, 27 Jul 2010 23:49:17 +0000

Professional consumer credit counseling services are available to help people who need to reduce their debt and recover their credit. When choosing a counselor you should try to find one who has accreditation through the Council on Accreditation or the International Standards Organization, does not work for profits and has experience exceeding ten years.

What Do Consumer Credit Counseling Agencies Do?

Your counselor should strive to not only help with your current debts but also put plans and goals in place for you. A good consumer credit counselor will be able to push for a lower percent interest on your credit or have your late fees deleted.

Another option they may arrange is for your loan to be stretched over a longer period so your payments become lower. Usually you will arrange to pay the counseling agency and they will then disburse your funds accordingly.

A Pathway To Financial Freedom

Having a firm plan for saving and future goals is very important. Whether you are an individual or have a family, they will plan a suitable budget for you to stick to so you can achieve financial freedom. Your agent will discuss ways you can avoid ever getting into debt again.

When people in the community are having financial difficulty, everyone can suffer. If your community is made up of people who are financially independent and comfortable, business and families will flourish. Sometime all people need is a helping hand and the results can effect many people around them. Donating to charities such as the American Red Cross supports free consumer credit counseling services nationwide.

Only Use Reputable Agents

There have been some horror stories to do with consumer credit counseling. You need to be wise when sifting through the thousands that are out there to be sure you don’t end up trusting a con artist.

Counselors who are part of the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies are certified and can be trusted to help. Some suggestion for respected agencies to try are nfcc.org, aiccca.org and incharge.org.

You can have your counseling over the internet. You need to fill out some information about your debts and credit and they work via email to create a plan for you. Some companies also offer online credit counseling courses for their clients who want to learn for their own personal reasons.

Avoid Future Debts

Having a firm plan for saving and future goals is very important. Whether you are an individual or have a family, they will plan a suitable budget for you to stick to so you can achieve financial freedom. Your counseling agent will discuss ways you can avoid ever getting into debt again.

Summary:

If you need help fixing your money problems, consumer credit counseling is for you. They will help you work out how to pay your debts and also build a secure financial future.

What are the Differences Between Debt Reduction and Credit Counseling?

admin — Sun, 25 Jul 2010 23:48:48 +0000

In today’s world, it is often easy to get in over your head and find yourself spending more than you make. It seems that everything is going up but wages, and it is all too easy to fall behind. As the result, debt incurred and accumulated over the time; initially, you are able to pay your credit card balances in full on each month and when more and more accumulated, you may go for minimum payment, then when come to the, your income may not afford to even support the minimum payments.

Like many who trap into unbearable debts, you may want to get rid of your debts by filling a bankruptcy. But bankruptcy can carry a legacy you will have to live with for years. A bankruptcy filing will stay on your record for a minimum of seven years, and you may find it difficult or impossible to obtain necessary credit in the interim.

Luckily, there are still others possible alternatives before you make up your ultimate decision on bankruptcy. You can enroll into a debt reduction program or enroll in a credit counseling program. These are the most popular debt solutions for many debtors, but you may confuse what are the differences between these two popular debt solutions, making you hard to decide your choice to enroll to credit counseling program or debt reduction program.

While there are some similarities between these two types of programs, there are some important differences to consider as well. Let us consider a few of the most important differences between debt reduction and credit counseling.

1. Close Your Credit Accounts

In credit counseling program, you will require to close all your credit accounts, exception for some exceptions like accounts for business needs, accounts with zero or very small balances. Whereas, debt reduction programs do not require all credit accounts to be closed. Sometimes, it’s good to keep a few of credit cards for emergency purposes.

2. Completion Period

Credit counseling services typically take longer to complete than debt reduction services. The average length of time to liquidate debt through a credit counseling service is 5 years whereas in debt reduction programs can be completed in less than a year.

3. Cost Saving

One of the advantages of debt reduction program over credit counseling program is in term of cost saving. In debt reduction program, you may only need to pay a settlement amount of 20% – 60% of amount owned. Whereas, in credit counseling program you normally need to repay a full amount owned with some discount and interest waived.

4. Credit Score

Your credit score is more affected in debt reduction program as compare to credit counseling program. In debt reduction program, the creditors may report the remaining amount between the amount you owned with the settlement amount as the “deficiency balance” to the credit bureaus as a negative item and it will be noted at your credit report and impact your credit scores. Generally, credit-reporting agencies will re-age the accounts of consumers enrolled in credit counseling services after three payments have been made.

5. Bargaining Power

In credit counseling program, your credit counselor will come out a debt repayment proposal to your creditors and it relies on your creditors to accept or reject the proposal. Whereas, with a debt reduction program, all creditors are will be notified about your hardship situation to repay your debt and you are desired to resolve it through a negotiated debt reduction agreement. Hence, creditors have no much choice in debt reduction program except try to negotiate to get back as much payment as possible from their debtors.

In Summary

Both credit counseling program and debt reduction program are a better debt solution option than bankruptcy. The two programs serve the same purpose to help you to get out from debts, but there are some differences between these two debt solutions and each program has its own pros and cons.

Cornie Herring is the author from http://www.studykiosk.com/CreditBasics. “StudyKiosk-Credit Basics” is an informational website on credit basics, debt solutions and bankruptcy.

Consumer Credit Counseling Services – Many are Scammed, Beware!

admin — Fri, 23 Jul 2010 23:45:46 +0000

Credit counseling agencies are nonprofit organizations that intend to help debtors to resolve their debt issues by providing counseling and education on consumer credit, money, debt management, and budgeting. And, most of time, debtors are advised to enroll into a debt management plan so that they can follow the plan to work out of debt. Debt management plan proposed by reputable and legitimate credit counseling agencies do serve the purpose.

But, beware that many very attractive debt management plans offered by companies who called themselves credit counseling organizations are actually scams who are trying to cheat your money and worsen your debt situation. So, how could you avoid yourself from falling into these traps? Let go through 2 scenarios that you will potentially faced when approaching a credit counseling service which may run by scams.

Scenario 1: Propose A Debt Solution Without Analysis Your Financial Situation

When you consult a credit counseling agency, the counselor suppose to analyze your financial situation by understanding all your debts, expenses and financial affordability before he work out plan that best fit your financial situation. If you found that your counselor is not paying attention when you explain your financial difficulties and he did not ask you the questions to get further understanding on your debt problem. What he is trying to do is propose their best debt management plan to you with a number of guarantees that your debt issue will surely be resolved if you enroll into the plan.

Don’t ever trust him else you will regret once you sign up and hand over your money. And, after that found out the propose debt management plan does not fit your financial situation. Avoid yourself from credit counseling agencies that propose to your one debt management plan that fit all financial situations. They just want to earn your money without really help in your debt problem.

Approach other credit counseling agencies and get one that really care about your debt problem, educate you on the cause of your debt issue, tell you what are your options based on your current financial status and guide you on the best debt solution with or without a debt management plan.

Scenario 2: Charge You An Upfront Cost Or The Fee Is High

The rule of thumb, credit counseling services are free of charge but most debt management plan (DMP) offered by credit counseling services have certain fee. The fee of DMP should be deducted directly from your monthly payment and it should not be too high; the reasonable fee should be plus minus $50. If you are asked to pay an upfront cost during sign up with the debt management plan, then it better to reject the plan and approach other credit counseling agency.

Beside that, before you sign on the agreement for the propose debt management plan, remember to check in details for any other hidden costs. There are unethical companies hide other costs to make the plan very attractive. These hidden costs will be written in the agreement. Unfortunately, most people won’t read the agreement in details when they sign on the dotted line. If you are unclear or need more time to read through the terms and conditions stated in debt management agreement, request to bring the agreement back to home for reading and sign back to the company if the terms meet your requirements.

Summary

Reputable and Legitimate credit counseling agencies are organization that help debtors to reduce and resolve their debt problem through counseling & education. They may recommend you to enroll into a debt management plan if your case really needs one. Whereas, credit counseling agencies run by scams care more on their profits than your debt problem. You should smart enough to differential them and avoid yourself from these scams.

What Are The Differences Between Debt Reduction & Credit Counseling?

admin — Wed, 21 Jul 2010 23:44:47 +0000

Both credit counseling and debt reduction are common solutions used by consumers for debt relief. But, people tend to get confuse between these two services and find difficulty to decide which option to select. While there are many similarity between these two types of debt relief programs, there are some key differences that you may want to take into consideration when deciding which option to go for. Let explore the major differences between debt reduction and credit counseling.

1. Credit Accounts

Most credit counseling programs will require you to close all your credit accounts. Although there are a few exceptions that allow you to retain account for business needs, most often you need get your accounts closed if you choose the service. On the other hand, there is no such requirement to close all your credit accounts in a debt reduction program. You will still allow to remain all your credit accounts active. It will be much more convenient to have credit cards, especially the cards standby for emergencies uses. However, keeping your credit cards may put you in risk of creating more debts to be added into your existing balances. So, if you are a person who can’t control the use of credit card, then credit counseling program might be a better option for you.

2. Duration Of Debt Liquidation

Credit counseling program requires longer time to be completed than a debt reduction program. Generally, this program will take about 5 years to liquidate debt, whereas, a debt reduction program often allow consumers to retire their debts in less than 2 years, but there are people manage to do in less than a year .

3. Total Debt Payment

Normally, the credit counseling companies will help their customers to negotiate a lower interest rate, making them pay less in interest. However, the principle of debt is remained, meanings that you will saving in total debt payment by paying less interest on credit counseling service. On the other hand, debt reduction program involves a negotiation to reduce the total debt amount, which can range from anywhere between 20% to 60%. In this program, you pay less in total debt which one of the advantage over credit counseling service.

4. Credit Score

If you choose to enroll into a credit counseling program, your accounts will be re-aged to current status after you have made three payments. On the other hand, your credit score will suffer if you choose to follow a debt reduction program because your credit report will still stated as late payment while you are settling your debt. But, at the end of the program, the creditor will report that your account has been “settled in full” which is one of the agreements in a debt reduction contract.

Summary

Now, you have a better idea on what are the differences between credit counseling and debt reduction program. You should consider them when deciding which option best fit your need for debt relief.

How to Find Free Credit Counseling

admin — Mon, 19 Jul 2010 23:45:32 +0000

The cheapest credit counseling is the kind you do yourself, but if youâ€™re having trouble with that, you can find free or low-cost counseling from a variety of agencies and public entities.

Do-It-Yourself Counseling

Although itâ€™s not technically counseling, you can do many of the things they do on your own.

Most services offer budgeting forms and money management advice. You can learn to budget your money by borrowing personal finance and budgeting books from the library or following advice available on websites like this. If you need budget software, you can find several free online sites to help track your spending and bills.

If your credit is decent, you can arrange a debt consolidation loan through a credit card balance transfer, personal loan, or home equity loan without involving a credit card counseling service.

You can also negotiate for lower interest rates directly, simply by calling your credit card company and asking.

Professional Free Credit Counseling

If youâ€™ve tried all of the above on your own without success or feel you need professional help, you can find it free. Many reputable counseling agencies offer free counseling for those in serious need. They may also provide free education materials and budgeting forms.

Certain programs are not free, however. Debt management programs nearly always include some kind of fee, although it varies by the amount of debt included and your ability to pay. Ask for a list of estimated fees before agreeing to anything.

If debt settlement is your only option, then it will also usually require a fee. Very few people succeed in settling debts on their own, but you can try.

Where to Find Free Counseling

If you need consumer credit counseling, start by contacting a local credit union, hospital, university, or military base. Although they may limit their services to members, patients, students, or service members, some also offer services free to the public. Credit unions are available to a wide range of people, so you should be able to find one you can join.

If none of the above is available to you, you can also contact local housing agencies for help. Because theyâ€™re funded by the government, they often provide free services.

Finally, contact a local community center to see if any local groups provide services. Several community centers offer money management classes that are free or low-cost. They may also be aware of volunteer organizations that provide free counseling.

If you need debt help, creating your own solution is the cheapest option. However, many people need professional help. Thereâ€™s no shame in asking for it. You can find free counseling if youâ€™re willing to look a little harder, but donâ€™t delay if it comes down to paying $15 or waiting another three weeks to get started.

For more articles and suggestions, visit http://www.Bills.com

What Are Credit Counseling Services

admin — Sat, 17 Jul 2010 23:51:22 +0000

If you are looking for a credit counseling service it is likely that you are already in financial danger. When a counseling service offers easy solutions to your problems, it can be hard not to believe them, especially if you’re on the verge of bankruptcy. In this article I will talk about credit counseling services and what you should know about them.

There are a number of good credit counseling services available, and they can greatly help you get back on your feet. However, you have to exercise caution because there are many services that are looking to take advantage of people who are already in a bad situation. Credit counseling services are good to use if you’re in a situation where you are not able to make your minimum monthly payments on loans or credit cards. Many people in this situation may already be receiving phone calls from collection agencies.

Credit counseling services typically deal with unsecured credit cards or loans. They do not work with secured loans, and this includes loans such as mortgages. They will look at how much you owe in order to set up a payment plan that suits your needs. They will also set up a budget for you. If you are on the verge of losing your home, they can provide advice for how to contact your lenders to request more time for making your payments.

If the credit counseling service is able to negotiate with your lenders, you will need to set up a budget in order to make your payments. Under these circumstances credit counseling services can be a great resource to help you. However, if they are not able to negotiate with your lenders, and it seems there is nothing you can do to catch up with your payments, it may be time to consider filing for debt consolidation or bankruptcy.

The first thing a credit counseling service will do is analyze your financial situation. They will then attempt to get your lenders to lower the interest rates. They will help you manage your debt, and you may have to pay them money that they will apply towards paying off the loans you have. These services make their money by charging fees for helping clients and helping creditors by setting up payment plans that allow the consumers to make payments. Many lenders will pay fees to credit counseling services who assist them.

When you are looking for a credit counseling service, there are certain things you should look for to make sure they are honest. Any service which charges high fees up front are often more concerned with making money than with helping you manage your debt. You should also be wary of companies that make outrageous promises. Any service that makes such claims is often fraudulent. If they make claims saying that their services will have no effect on your credit rating, this should be a cause for concern.

If the credit counseling service is helping your manage your debt, they should be able to make payments in a timely manner. The best way to choose a credit counseling service is to look for institutions that are listed in the National Foundation for Credit Counseling. If they are not listed, they may be a fly by night operation, something you will want to avoid. While the chances of an accredited institution defrauding you is low, you should still research them to make sure there are no problems.

Being in a financial strain is hard enough as it is. You don’t want to use a credit counseling service which will add insult to injury by defrauding you.

Using Online Credit Counseling to Ease the Burden of Embarrassment

admin — Thu, 15 Jul 2010 23:45:14 +0000

If you have been struggling to get rid of harassing creditors, then online credit counseling may be the way to go. Online credit counseling can be purchased, but there are also free and non-profit organizations available. You can go to a credit counselor if you like, but going in to see a counselor face to face can be embarrassing, and you may lose some confidentiality over time as people tend to get to know you and talk.

Online credit counseling is a convenient and flexible way for you to to get personalized, and more importantly, completely confidential assistance. It is important to realize the difference between credit counseling and credit repair services, as credit counseling only gives you information and helps you develop a plan on how to repair your credit, whereas credit repair services actually help you do some or all of the work.

Simplicity

Signing up for online credit counseling is the smart thing to do, provided you are able to differentiate the good counseling services from the bad ones. Just be sure to keep in mind that not all online credit counseling services are created equal. A good credit counselor will be able to access your online application and be able to provide you a quick, reliable service that you can count on with the convenience of applying at your own pace.

Services

Most of the credit counseling agencies provide their customers with assigned counselors to make their services more personalized and customer friendly. Online services not only erase any concerns or embarrassment of a face-to-face meeting, but also ensures absolute confidentiality. If you are not meeting face to face with someone in your area, confidentiality cannot be compromised. Whatever your situation, online credit counseling services can be fast, friendly, simple and effective. Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes.

Repair

An online credit counseling agency could also assist you with repairing your credit and establishing a budget you can live with from month to month. A credit counselor can help you make the long term plans and decisions you need in order to engage in effective credit repair, as well as how to handle money in the future to keep the problems from resurfacing again later.

If you are at the point where you are ready to do whatever it takes to take care of your debt and other financial issues, or sick of living paycheck to paycheck, then hiring an online credit counselor can help you reach your goals and teach you to handle your finances into the future. Online counselors can help you to develop a deliberate and effective credit repair strategy.

Tips for Finding the Best Debt Management & Credit counseling programs

admin — Tue, 13 Jul 2010 23:47:06 +0000

The main problem faced by most of the American citizens today is the personal and consumer debt. The debt management and credit counseling programs are indispensable in today’s economic conditions. These debt management programs can help you to make huge savings. The monumental amount of debt much more than just a burden.

Thankfully, the debt management programs are helpful to the borrower to get out of the disputes. The credit card crisis and the accumulating debts of the Americans have made a sudden explosion of countless numbers of Debt management firms. Some of the debt management systems are taking advantage of the demand and are defrauding their clients by offering false promises. It is difficult to sort out the best Debt management firm today. However, you can ease the search of the best Debt management and credit counseling program by following the tips mentioned below.

Always check whether the firm Licensed to provide Credit Counseling in your State

According to the credit counseling rules and regulations, not just anyone can start a credit counseling firm in any state. Every firm should be licensed to operate in the State. The licensing is done by the National Foundation for Credit counseling to find and punish the scammers. The licensing will be awarded after confirming the credibility of the credit counseling service provider. You can avoid the credit counseling scams by signing up with the firms with proper licensing from NFCC. Some of the best debt management service providers like Advantage CCS are licensed to provide credit counseling in many states including Alabama Alaska, Arkansas California, Florida Georgia, Hawaii Kentucky, Louisiana Nevada, New Mexico New York, Ohio Pennsylvania, South Dakota Tennessee, Texas Washington and West Virginia Wyoming.

Look for a collective Debt Management Solution

The term debt management represents a collection of services like credit counseling, debt management tips and free counseling to get a debt management loan. You should make sure that all these services are available with the debt management firm of your choice. The credit counseling professional should be well aware of the current market and also should be able to explain you the pluses and minuses of every debt management solution.

Ask the Credit counseling service provider whether the service is free of cost

Always remember the fact that most of the debt management firms available today provide free counseling services. However you will be charged a minimal amount for some premium counseling options. You should make sure that the debt management firm is not demanding any charge for the basic credit counseling. You can find lots of free counseling services in with the help of Internet.

Considering all the above mentioned factors will definitely ease your search for the best debt management firm.

Get Rid of Credit Card Debt With Credit Counseling

admin — Sun, 11 Jul 2010 23:48:26 +0000

Credit card debt has been an ongoing problem ever since the credit card was created in 1950. People were going into debt at an astounding rate. Many are trapped into unbearable credit card debt that they couldn’t possibly pay it all back.

A debt free life is a dream to many debtors. There are many options available today for you to get rid of your credit card debt, but the keys to success are your patient and consistency to carry out the plan in your selected option. This article will discuss on one of credit card debt solutions called Credit Counseling.

What is Credit Counseling?

Credit counseling was introduced by federal government to provide counseling services and help you to find out what steps you could take in order to relieve from your debt. The credit counseling companies will assist you to set up a payback plan that will help you to get out of debt within a certain years.

The credit counseling agencies are designed to be non-profit, which means majority of your payments must be earmarked for debt payment. However, credit counseling agencies can legally collect a small fee for administrative costs, but most of the counseling services’ fees are paid by the lenders themselves, which send back to the services a portion of the payments received.

How Does Credit Counseling Work?

Typically, counseling services help you to negotiate lower payments with credit-card companies. Before a credit counselor proposes to you a repayment plan, he normally will do some assessment on your current financial status and get detail information on your debt condition.

Your counselor can then map out different ways to debt consolidation, potentially pushing all or most of your outstanding balances onto one or two low interest cards or even taking out a debt consolidation loan to get rid of some or all of your credit card debt.

When Do You Need Credit Counseling?

If you are able to pay your bills and are current on all your accounts, you almost certainly don’t need credit counseling. If your interest rates are too high, you usually can negotiate a lower rate with your credit-card companies just by asking or threatening to move your account elsewhere.

You will need credit counseling if:

You can’t pay the minimums on your credit cards.

You’re consistently late paying one or more of your regular bills.
You’re being hounded by creditors and collection agencies.

Your efforts to work out reasonable repayment plans with your creditors have failed.

If you are too serious in dept, a credit counseling service may not able to successfully help to negotiate with credit card companies for a payment that will give you breathing room or get you out of debt. If that is true, bankruptcy may be the best of bad options.

In Summary

If you have unbearable credit card debt and the harassing creditor phone calls have made you in deeply stress which causes you can’t think of an idea or a way to settle your credit card debt, a credit counseling service should be able to help you. By going through credit counseling process, you will have a better picture on the options available to you to get rid of your debt; enroll to propose payback plan that best suit you financial capability.