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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.
Credit Repair Fraud
If the intention is to avoid bankruptcy shouldnt credit counseling ameliorate this situation rather than making it worse?
Never borrow to buy anything you can consume; you should be able to afford it now or you should not buy it. 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. Hundreds of people kill themselves every year because of it.
But what do you do if your debt is simply too high and you need help?
If your income decreases then you must spend less and not borrow more. If you have negative items on your credit report it is wise to start changing your payment habits immediately and start working towards good credit now. Several class action lawsuits are already winding their way through the court system on this apparent conflict of interest. Several class action lawsuits are already winding their way through the court system on this apparent conflict of interest. Pay back what you borrow at the agreed upon times and in the agreed upon amounts.
But, if you decide to pay 0 per month, the repayment period is likely to be doubled.
But most people want to repay their debts and just need a little more time to do that. For a nominal fee, and a percentage of the proceeding of a debt consolidation, they can help lift the worry, stress and strain of debt from your shoulders. Once we realize that it is too late. |
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