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Credit Counseling Companies
Credit counseling companies are not always what they appear to be. While many credit counseling companies, both for profit and not for profit, are very legitimate businesses with only the consumers best interest at heart, some unscrupulous operators are giving that industry a bad name. A few issues have arisen over the last couple of years that relate to the actual status of some companies that claim to be not for profit, how money they charge consumers, and who exactly pays the costs of some of these firms. Credit counseling companies in a number of states have drawn the attention of the Federal Trade Commissions office which has so far as to shut some of these businesses down completely and others have been fined and threatened with similar action if they do not change some of their practices. These charges have shone a new spotlight on a segment of the financial services sector, which had been operating with little attention, and out of control, according to some knowledgeable observers and industry watchers.
Several credit counseling services that have been under the Federal Trade Commissions magnifying glass are the National Consumer Council which has been masquerading as a not for profit agency while simply raking in profits like they were going out of style. One of the most famous or infamous amongst this group is Ameridebt that was shut down for defrauding individual Americans who were seeking debt relief of millions of dollars in hidden fees and charges. Other for profit companies providing credit counseling have also been exposed as serving several employers as they receive funding from the credit card industry to cover all of their overhead costs. Not only is the money they receive from clients pure gravy but also a lot of observers are questioning their loyalty to the people that they are in business to serve. Several class action lawsuits are already winding their way through the court system on this apparent conflict of interest.
Another major area of contention has arisen about the validity and effectiveness of the whole credit counseling process on the credit rating of the individual who goes through this process. There are a few flaws in the current process that actually make it harder and longer to regain your credit through this process than even through bankruptcy. If the intention is to avoid bankruptcy shouldnt credit counseling ameliorate this situation rather than making it worse? There are plenty of great credit counseling firms in the marketplace. Just be sure to do your checking first because sometimes credit counseling companies are not what they appear to be.
Referring Consumer
Taking part in credit counseling can help you get your credit back on track.
We start young without any knowledge and the only experience that we pick up, as we get older is that we can get more credit when our current supply runs out. In return for this debt reorganization plan your creditors agree to stop all collection proceedings and all attempts to seize your assets or garnish your wages. These are called unsecured debts.
Finally, never use one credit card to make a payment on another credit card.
Remember, once your creditor takes you to court and wins a judgment, it will be reported as a public record in your credit file and stay there for 7 to 10 years. Despite the fact that we live in a world where credit has replaced currency or income as the means to make purchases and even for the basics of life, very few people understand the basic principles that underline our credit-based consumer society. A debt negotiation service can help you to negotiate lower interest rates and a better payment plan with your creditors.
Are these compulsory?
Make a list of all these obstacles so that you can confront them head on. Your goal each month should be to make the minimum monthly payments to all your debt except for the debt that you have that is in the one position. A credit report is one way that you can stay on top of your current debt and have a better understanding of the impact that bad credit can have on the rest of your finances. It is not ideal, but unfortunately there is not much else you can do. Its important that youre as honest as possible about your financial situation and the amount of debt that you owe. |
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