 |
||||||||||||||
 |
||||||||||||||
|
Debt Management and Credit CounselingIf you are looking for alternatives to Chapter 7 or Chapter 13 bankruptcy, debt management and credit counseling organizations are good places to start. There are many reasons why an individual ends up with financial difficulties. It could be the loss of a job, unforeseen medical expenses, improper planning or living beyond one’s means. In any case, speaking to a certified professional about debt management and devising a plan of action is a proactive way to pay-off your debt and come up with a realistic financial plan moving forward. Credit Counseling OrganizationsMost credit counseling organizations will work with you to come up with a reasonable budget based on your current income and debt. Some of these organizations are not-for-profit and charge a minimal fee or may waive the fee altogether. If you find an organization that you are comfortable with, make sure and ask them about the costs up front so you don’t end up in a bad situation. Be wary of high-pressure tactics and unrealistic promises. Debt management programs are not magic, they take sustained effort and discipline in your spending habits to make them work.
Government AgenciesDo your homework; there are government agencies that can help you for a modest administrative fee or no cost at all. There is plenty of free information available on government websites regarding debt management and debt relief. I have found this information be honest, reliable and very affordable. You can also check with your local bank or credit union as they may offer free debt management seminars and classes. The most important aspect of a debt management and credit counseling organizations is trust. Debt Management ContactsThe numbers and links below come from the “Consumer Action” website, a Government website that provides information and assistance to individuals with debt problems. These organizations are not-for-profit and recommended by Consumer Action. Remember “Not-For-Profit” doesn't’t necessarily mean that these services offered are free. The Consumer Action Website > ConsumerAction.GOV Recommended Organizations:American Consumer Credit Counseling - 1-800-769-3571 InCharge Institute of America - 1-800-565-8953 Money Management International - 1-866-899-9347
Debt Management Programs and OptionsMost credit counseling organizations will help you to create a budget and teach you the fundamentals of money management. They will certainly look at your current income and the debt that you have accumulated. In extreme cases, if the debt is not manageable, they may recommend filing for bankruptcy. Another option is a debt management program (DMP). Be advised that you should enter a debt management program only after a certified credit counselor has carefully reviewed your case and talked with you personally about the program. Under a DMP you would be asked to deposit money in the account of the credit counseling agency and they would make payments on your unsecured debt such as medical bills, a student loan and credit card bills. The DMP counselor will help create a schedule of payments that is agreeable to you and the people you owe money to (your creditors). Depending on who the creditors are, they may agree to some concessions (such as a lower interest rate) rather than take the risk of having you enter into bankruptcy. Debt management programs could last up to 4 years depending on your situation. Debt Management Programs – Be CarefulBe wary of your Internet searches as there are many questionable organizations that are looking to take advantage of a person in trouble. Beware of the “Quick Fix”, as it takes time to payoff debt, even in bankruptcy there isn't a completely free ride. Use your best judgment, or better yet have another family member or a person you trust review your decision before you sign on the dotted line. Watch out for credit counseling organizations that charge exorbitant fees and want this money “Up-Front”. If the credit counseling organization will not send you any information free and up-front, without giving them your credit card you will want to reconsider doing business with them. You may want to think twice about signing up with a credit counseling organization that is attempting to place you in a debt management program without careful review of your financial situation. A good credit counseling organization will do careful assessment of your financial world. They will offer to teach you about budgeting and money management and will never pressure you to sign up for paid services without a thorough evaluation and counseling. |
|||||||||||||
| ||||||||||||||
