Debt Scam: What is credit counselor?
Recently there's been a strong drop in the number of people turning to credit counseling agencies for help in paying back their debts. National Foundation for Credit Counseling refers this to the incidences of bad credit counseling. So, what is credit counseling?
Among other services, credit counseling agencies offer debt management plans (DMP), in which they negotiate with your creditors on your behalf. You send the credit counseling agency one check each month, which the office divvies up among your creditors based on the negotiated agreements.
The agencies are funded, in part, by credit card companies, which make "fair share" contributions to the counseling agencies based on a percentage of the amounts the agencies collect on their behalf. So, credit counseling agencies are usually able to work out reasonable payment plans with your creditors.
For credit card debts, they can't lower your balances, but they can often get late and over-limit fees wiped out and lower your interest rates, usually resulting in a lower monthly payment. Another benefit is that if you're being hounded by a collection agency, working with a credit counseling agency can, in effect, call off the dogs.
A debt settlement plan sounds similar to a debt management plan, but there's a world of difference. Whereas a debt management plan will lower your monthly payments, debt settlement companies claim they can help you pay off your debts for pennies on the dollar.
Such companies often advise people to stop making payments to their creditors and to send them the payments instead. The companies say they will save the money until they have enough to make a settlement offer. But there's no guarantee that a creditor will accept such an offer. Plus, when you stop paying your debts, your balances will grow quickly because the interest and fees continue.
Depending on where you live, all those missed payments may prompt creditors to garnish your wages and place liens on your property. Further, if the debt is settled, you may have to pay taxes on the portion of the debt that was forgiven.
In my opinion, do not work with debt settlement companies. However, if you've done your best to deal with your debts on your own but are still struggling, do consider a debt management plan through a reputable credit counseling agency.
Since 2000, CuraDebt has been helping individuals and small business owners find peace of mind and solutions to the stress of financial challenges. CuraDebt covers Alabama, Alaska, Arizona, Arkansas, California, Delaware, District of Columbia, Hawaii, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, Wyoming, Florida, and North Carolina.
Financial challenges could result from many reasons, the primary ones being the stress of debt from credit cards, personal loans, tax debts or other debts. With over a decade of experience, the CuraDebt counselors are in a perfect position to listen, understand, and make recommendations after having a clear understanding of your situation. When you speak with a CuraDebt counselor, you benefit from their years of experience in the industry and can get a referral to a solutions provider listed with the BBB with an A or better rating to assist you.
Among other services, credit counseling agencies offer debt management plans (DMP), in which they negotiate with your creditors on your behalf. You send the credit counseling agency one check each month, which the office divvies up among your creditors based on the negotiated agreements.
The agencies are funded, in part, by credit card companies, which make "fair share" contributions to the counseling agencies based on a percentage of the amounts the agencies collect on their behalf. So, credit counseling agencies are usually able to work out reasonable payment plans with your creditors.
For credit card debts, they can't lower your balances, but they can often get late and over-limit fees wiped out and lower your interest rates, usually resulting in a lower monthly payment. Another benefit is that if you're being hounded by a collection agency, working with a credit counseling agency can, in effect, call off the dogs.
A debt settlement plan sounds similar to a debt management plan, but there's a world of difference. Whereas a debt management plan will lower your monthly payments, debt settlement companies claim they can help you pay off your debts for pennies on the dollar.
Such companies often advise people to stop making payments to their creditors and to send them the payments instead. The companies say they will save the money until they have enough to make a settlement offer. But there's no guarantee that a creditor will accept such an offer. Plus, when you stop paying your debts, your balances will grow quickly because the interest and fees continue.
Depending on where you live, all those missed payments may prompt creditors to garnish your wages and place liens on your property. Further, if the debt is settled, you may have to pay taxes on the portion of the debt that was forgiven.
In my opinion, do not work with debt settlement companies. However, if you've done your best to deal with your debts on your own but are still struggling, do consider a debt management plan through a reputable credit counseling agency.
Since 2000, CuraDebt has been helping individuals and small business owners find peace of mind and solutions to the stress of financial challenges. CuraDebt covers Alabama, Alaska, Arizona, Arkansas, California, Delaware, District of Columbia, Hawaii, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, Wyoming, Florida, and North Carolina.
Financial challenges could result from many reasons, the primary ones being the stress of debt from credit cards, personal loans, tax debts or other debts. With over a decade of experience, the CuraDebt counselors are in a perfect position to listen, understand, and make recommendations after having a clear understanding of your situation. When you speak with a CuraDebt counselor, you benefit from their years of experience in the industry and can get a referral to a solutions provider listed with the BBB with an A or better rating to assist you.
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