Debt Management Credit Counseling

What’s the Difference? Credit Counseling, Debt Settlement, Debt Consolidation, and Debt Management

Posted by on April 27, 2012 Comments Off

By  Albie DiBenedetto

For people struggling with credit card debt, there are several debt repayment options offered by organizations to help you. Some people think they’re all the same, or that they’re all scams. The repayment options are all legitimate but, frankly, some of the organizations are shady. The options are only as legit as the organization that offers them. Let’s make this as simple as possible and break down each option.

Credit Counseling:

Credit counseling is a process where a certified personal finance counselor reviews your financial situation, and provides education and advice on how to better manage their finances. The process includes a complete budget analysis, where all income and expenses are determined. The cause of the debt is determined and possible repayment solutions are examined. A credit counseling agency can help an individual determine the best repayment option, while also offering education to help them manage their personal finances and avoid problems in the future. Options can include bankruptcy, a debt management plan, or a revised budget plan. Agencies typically offer free counseling, only charging fees if you opt to enter a debt management plan.

Debt Management Plan:

A debt management plan is only available to those who complete a credit counseling session. Even then, the counselor must determine if this is an appropriate option for you. Not everyone qualifies. In this plan, the agency will secure lower minimum monthly payments or lower interest rates from your creditors, making repayment more feasible and affordable for the debtor. Any accounts entered into a debt management program must be closed. Your payments will be consolidated into one that is paid to the agency, and they disburse to each credit account.

Debt Consolidation:

Debt consolidation is essentially taking out one large loan in order to repay your other debts. This loan usually has a more attractive interest rate than your existing debts, and allows you to have only one outstanding loan rather than many. Your payment will be lower, but it will take you longer to repay and it will usually cost you more in the long run.

Debt Settlement:

Debt settlement is a negotiated reduction of your owed balance, and a lump sum payment is made to your creditor. Creditors typically won’t consider accepting a settlement until you are a few months past due for payment. So you must first do damage to your credit report. If you don’t have the funds for a lump sum payment, a debt settlement company can set up a third party trust account in which your funds can accumulate. You essentially make payments to the settlement company instead of your creditor for a few months. Once your savings are built up enough, the negotiation can begin. The debt settlement company will take a percentage of the agreed upon amount. Accounts that are reported as settled are scored negatively on a credit report until they are paid in full. Even then, your report will contain negative information from the previous missed payments.

Remember that each option has it’s pros and cons for each individual situation and, whatever your choice, you should research the organizations before signing on for any repayment plan. You can do so by looking them up on the Better Business Bureau website, http://www.bbb.org. For credit counseling agencies, you can also check with the Association of Independent Consumer Credit Counseling Agencies (AICCCA) at http://www.aiccca.org.

ABOUT ACCC: American Consumer Credit Counseling (ACCC) is a non-profit 501 (c) (3) organization dedicated to empowering consumers to regain control of their lives through education, counseling and debt management. ACCC provides individuals with practical solutions for solving financial problems and recognizes that consumers’ financial difficulties are often not the result of poor spending habits, but more frequently from extenuating circumstances beyond their control. As one of the nation’s leading providers of financial education and credit counseling services, ACCC works with consumers to help them with the best plan of action to reduce their debt and regain financial stability. For more information or to access free financial education resources log on to http://www.consumercredit.com.

Article Source: http://EzineArticles.com/?expert=Albie_DiBenedetto

Exposing the Credit Counseling Services, Debt Management Programs, Etc

Posted by on April 27, 2012 Comments Off

By  S Wheeler

While there are numerous companies offering debt management programs out there who are out to scam you but there are far more reputable companies. This is where researching the companies thoroughly comes in handy and is a must and not an option. A good tell all sign that something may be a scam is if the credit counseling company asks you to agree to extremely large “sign on” fees or “monthly processing fee”.

The role of the company is to assist you in getting out of debt and not further into it by charging you enormous feeds on top of what you will be paying the creditors. Beware of promises that seem “too good to be true”. Chances are they probably are too good to be true. Remember the old saying when you grew up? Well apply it here as well. Some people before coming to debt management programs have fallen pray to the “debt elimination” scams. No matter what anyone tells you, there is no way to just “wipe out” your debts. The person selling this program gets your money and you get a bunch of useless information that doesn’t help you get out of debt any faster. To be sure you aren’t falling prey to a scam, check with your state to  see if the company is license in your state.

In addition there are two accrediting bodies that you can check for debt management companies. They are the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. Another great way to find an approved and legal agency is to use the ones that the government recommends for bankruptcy filers. These can be found on the Department of Justice’s website. Remember there is always going to be someone trying to make a buck on another person’s misfortune.

Click here for your FREE E-Book Download on the debt secrets they don’t want YOU to know about.

Article Source: http://EzineArticles.com/?expert=S_Wheeler

Solutions For Credit Card Payment – Debt Management Programs With Free Credit Counseling

Posted by on April 15, 2012 Comments Off

By  Nick Lorson

If you are a credit card debtor, then there is no doubt that you are suffering from the severe frustration caused by the recent financial turmoil because you have lost your resources because of the economic instability. Now, you do not have enough financial resources for the repayment of your loan which is becoming doubled each passing day due to the piling interest rates and penalties over non payments. Most of the credit card debtors are preparing to file for bankruptcy because they have no other resources for their massive loan repayments. But now, they do not need to worry about it anymore because there are solutions available in the shape of debt management programs with free credit counseling,which can enable the debtors to repay their huge credit card debts in the most convenient and affordable ways.

You can avail numerous debt management programs for an affordable repayment of your massive debts. These programs include debt counseling, debt settlement and debt consolidation programs. The core purpose of all of these programs is to make your financial strength better and repay your massive debt gradually and completely eliminate it. In debt counseling program, the credit councilor will ascertain your exact financial capability and will give advice regarding the selection of particular debt management program which best suit your needs and financial strength. There are various non-profit agencies providing free counseling to credit card debtors to enable them to repay their debts most conveniently and affordably. If you choose the debt settlement program, then you can get reduction in your debt to more than half and repay your remaining debt in easy installments or in lump sum. If you choose the debt consolidation program, then you can get a huge single loan to repay all of your existing debt. This consolidated loan is will be collateralized and you do not need to pay higher interest rates over it.

Now, it depends on you that what option you have to choose. In this respect, you must follow the advice of your free debt councilor because as this advice is not with money making purposes, so it will be in your best interests.

If you have over $10k in unsecured debt it could be a wise financial decision to consider debt negotiation. Due to the recession and overwhelming amount of people in debt, creditors are more than willing to negotiate your debt balance. There are also other debt relief options. Check out the following link to speak with a debt relief counselor for a free consultation.

Free Debt Advice [http://www.freedebtsettlementadvice.com].

Article Source: http://EzineArticles.com/?expert=Nick_Lorson

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