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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.
Legal And Free Credit Repair
More likely than not the recommendation will be bankruptcy protection or formal debt consolidation.
With the easy availability of credit even to teenagers and students, people are getting into debt problems a lot younger than ever. It shows your payment habits and what financial rulings have been made against you (collections). Ask them as well if they have any brochures or materials about their services that you can pick up or order online. If your income decreases then you must spend less and not borrow more. There may be something on your credit report that you do not agree with or would like to dispute.
Take your time finding just the right debt settlement company for your needs.
So you are going to get privilege in future. 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. Ask these questions to your counselor: Is there any monthly charge, set up charge or penalty for leaving the program? What teenage girl can do without the latest tank top or shoes? There are no secrets in the credit industry and if you have changed addresses or even names your credit history is likely to follow you.
This means that there is no collateral attached to the money that is loaned and therefore the creditor may be willing to settle since they dont have any other guarantee for the lending of the money.
Proper Debt Management To Avoid Credit Counseling Credit counseling is a place of last resort for consumers who have never learned the basics of credit and debt management. Building credit history, and understanding the logistics behind it, is crucial to getting out of debt and staying out of debt. For the debt with the lowest number give it the number one. Do you spend too much? For each separate debt entry that you have, divide the entire amount by the monthly payment that youve been paying. |
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