You have probably seen and heard ads for Consumer Credit Counseling and Debt Management Programs. Of course anyone advertising such a service is going to make it sound like the best thing since sliced bread. Well, folks – bad news.
We live in a world full of frauds and liars, and some of these debt counseling companies just are not who they say they are. It takes a bit of research to ensure you’re not being taken, but any time you put into researching the process will be well worth the time.
Is Christian Consumer Credit Counseling Right For Me?
CCCS or Christian Consumer Credit Counseling should only be used if you barely cover the minimums on all of your credit cards. If your credit is still good and have too much debt to where you haven’t been taking any ground in paying it down you may be a good candidate for a credit counseling plan. If after talking to a credit counselor about a plan and they suggest that it will take you longer than 5 years on a plan to pay off your debt you might be a better candidate for bankruptcy. To file bankruptcy you will need to speak with a bankruptcy lawyer.
Consumer Credit Counselors – What Questions to Ask Them
If you have decided to go with debt management company, be very careful about whom you choose to sign up with. The choice you make is going to be with you for a very long time. Be sure to research thoroughly any company by checking with the BBB or Better Business Bureau and by doing a Google search. Be mindful of what comes up in the organic search results
Some of the more common warning signs of a less-than-reputable CCCS providers include:
* Large Fees. You’ll find that Consumer Credit Counseling Services (actual affiliates of the not-for-profit National Foundation for Credit Counseling) usually charge a whopping $10 as a set-up fee. There are private, for-profit services that charge more but are also reputable and effective. Any company asking you for thousands of dollars up front, though, is an entity you want nothing to do with.
* All Talk. If the company you’re considering says it can settle your debt for pennies on the dollar without hurting your credit rating, run don’t walk to the next company on your list. Any reputable company will acknowledge that their power to negotiate a lower interest rate (not a near elimination of the sum of your debt) is its key selling point, and that it cannot control the effect of the counseling on your credit rating.
* Lack of Payments Made. Some companies will take your first payment and keep it as their fee instead of paying off your creditors. Be sure to speak up front if the counselor you’re considering is going to pull one of these moves, because it can – of course – damage your credit even further if your creditors don’t receive the first payment under the new program on time.
* No Statements. If they give you statements, something’s wrong.
* Lack of Proper Accreditation. If a company says it’s not-for-profit, an affiliation with the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling is a must. If you have any doubts whether the supposed not-for-profit counselor you’re considering is an affiliate, make them show you their accredidation.
Debt Management Programs are not for everyone. Do your homework up front to avoid problems later on down the road.
