Debt Help: If you’re not disciplined enough
to create a workable budget and stick to it, can’t work out a
repayment plan with your creditors, or can’t keep track of
mounting bills, consider contacting a Credit Counseling
organization. Many Credit Counseling organizations are
nonprofit and work with you to solve your financial problems.
But be aware that, just because an organization says it’s
“nonprofit,” there’s no guarantee that its services are free,
affordable, or even legitimate. In fact, some Credit
Counseling organizations charge high fees, which may be
hidden, or urge consumers to make “voluntary” contributions
that can cause more bills.
Most credit counselors offer services
through local offices, the Internet, or on the telephone. If
possible, find an organization that offers in-person Debt &
Bill Counseling. Many universities, military bases, credit
unions, housing authorities, and branches of the U.S.
Cooperative Extension Service operate nonprofit Debt and
Credit Counseling programs. Your financial institution, local
consumer protection agency, and friends and family also may be
good sources of information and referrals.
Reputable Debt Help organizations can
advise you on managing your money and money owing, help you
develop a budget, and offer free educational materials and
workshops. Their counselors are certified and trained in the
areas of consumer credit, money and debts management, and
financial budget. Counselors discuss your entire financial
situation with you, and help you develop a personalized plan
to solve your money problems. An initial counseling session
typically lasts an hour, with an offer of follow-up sessions.
Debt Help Plan: If your financial
problems stem from too much debt or your inability to repay
your debts, a Debt & Bill Counseling agency may recommend that
you enroll in a Debt Consolidation Program (DMP). A DMP alone
is not Debt Help, and DMPs are not for everyone. You should
sign up for one of these plans only after a certified Debt
Negotiation has spent time thoroughly reviewing your financial
situation, and has offered you customized advice on managing
your money. Even if a DMP is appropriate for you, a reputable
Debt Negotiation organization still can help you create a
financial budget and teach you money management skills.
In a DMP, you deposit money each month
with the Debt Negotiation organization, which uses your
deposits to pay your unsecured debts., like your credit card
bills, student loans, and medical bills, according to a
payment schedule the counselor develops with you and your
debtors. Your debtors may agree to lower your interest rates
or waive certain fees, but check with all your creditors to be
sure they offer the concessions that a Debt & Bill Counseling
organization describes to you. A successful DMP requires you
to make regular, timely payments, and could take 48 months or
more to complete. Ask the Debt Help to estimate how long it
will take for you to complete the plan. You may have to agree
not to apply for — or use — any additional credit while you’re
participating in the plan.
Make sure your protected
Be wary of Debt Couseling organizations
that:
charge high up-front or monthly fees for
enrolling in Credit Counseling or a Debt Management Plans.
pressure you to make “voluntary
contributions,” another name for fees.
won’t 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
Consolidation Plan without spending time reviewing your
financial situation.
offer to enroll you in a Debt Counseling
Plan without teaching you budget and money management skills.
demand that you make payments into a
Debt Consolidation Plan before your creditors have accepted
you into the program
