The Facts about Nonprofit Credit Counseling Companies
In these difficult economic times, it’s common for people to live from paycheck to paycheck. They worry about dealing with debt collectors constantly. A workable budget seems unreal to them, and money for retirement is out of the question. When people find themselves in such a situation, there is help available. It may be time for them to consider the services of a non-profit credit counseling agency.
Locate a reputable agency first –
You should not settle on the first non-profit agency you see without doing some homework on them and their reputation. You should be willing to contact more than one agency and ask each of them to send free information explaining their services and any associated fees. If an agency is not willing to do this, it should be considered a red flag. Once the list has been narrowed down to one or two, the next step is to research each one with the state’s Attorney General’s office and Better Business Bureau. Also, you should check with local consumer protection agencies and also with the National Foundation for Credit Counseling (NFCC) on their status and membership.
Many have local offices if you want in-person counseling –
A reputable non-profit credit counseling agency will offer services at their office locations, over the telephone, and also online (the most preferred method by many consumers). Many of these agencies provide in-person counseling if you seek a more hands-on approach. A list of local non-profit credit counseling agencies can be found at universities, housing authorities, military bases, credit unions and more. You can always check out the NFCC to find an agency near you. However, with technology growing by leaps and bounds every single day, online counseling is a very popular method and can be completed from the privacy and comfort of your own home on your desktop computer, tablet, or laptop.
Questions are always welcome –
A credit counseling agency will want to be asked questions and will expect it. People should want to know what services a non-profit credit counseling agency can offer. Do they offer savings and debt management classes? Do they offer budget counseling services? Do they offer bankruptcy help if you are thinking about that? If an agency is contacted, and they don’t ask about a person’s financial situation BEFORE talking about debt management, this should be considered another red flag.
Find out about any fees –
Every counseling agency should be very upfront about their fees. It’s important to ask if there is a set-up fee or monthly fees associated with a service. An individual should not go with an agency that does not provide an itemized list (in writing) of the fees. It’s also important to ask if a person is not able to afford the monthly fees for whatever reason, what will happen then.
Most non-profit agencies offer a fee waiver if certain income guidelines are met. If a person truly cannot afford to pay any fees, they should never be turned down. A true non-profit agency will still help them even if they can’t afford to pay the fees. If a non-profit agency doesn’t help someone because of their inability to pay, they may want to consider looking for another agency.
Discuss all of your creditors –
The agency will be able to contact all of the creditors on behalf of their clients and discuss a reduced payment plan with them. It’s also important to ask if the non-profit credit counseling agency is able to get creditors to provide lower interest rates or eliminate fees. Ask if they are able to waive finance charges as well as any late fees. An agency will tell a person if they’ll have to make any payments BEFORE their proposal is accepted by the creditors. A proposal is just a written agreement between the debtor and the creditor as to what the creditor will accept as payment each month and other terms like the payment date.
Advantages to free credit counseling –
When a person signs on for the services of a non-profit credit counseling agency, they will be able to consolidate all of their unsecured credit card debt into a single monthly payment that gets paid to the counseling agency. They will no longer have to make multiple payments to multiple creditors. It will be just one payment a month. The credit counseling agency will disburse that money out to all of their creditors on the debt management plan. The total monthly payment will usually be reduced. Many clients pay less each month than they would on their own.
Success stories of that agency –
Many consumers have been helped by debt relief programs offered by non-profit credit counseling agencies. On average, individuals have saved over $180 a month on credit card payments, sometimes more and sometimes less. This can happen when credit card fees are waived, interest rates are lowered, and debt is properly handled with the creditors. Millions of people who did not see a way out of debt are provided with a clear and understandable resolution. You will be given an estimated date of when all your debts are to be paid off.
Why is debt management needed –
Sadly, the need for debt management plans has skyrocketed in recent years, as more and more Americans get into debt that’s over their heads. Most of the time, this is due to the irresponsible use of credit cards, but sometimes it happens due to unforeseeable circumstances, such as the loss of a job, an accident or illness, or a family emergency. Whatever the causes, the need for a debt management plan is at an all-time high, so you are not alone.
Debt management plans can help –
Debt management plans are a vital service provided by both for-profit and non-profit organizations to help consumers better manage the repayment of their unsecured debts. The term ‘debt management credit counseling’ actually describes two distinct services – debt management and credit counseling. The credit counseling part takes place first. It entails a discussion between the client (debtor) and a trained and certified credit counselor that is designed to get a clear financial picture and map out ways to make the best use of the client’s income for paying off unsecured debts. In some cases, this discussion reveals that the client cannot feasibly continue making monthly payments on time by themselves, which indicates the potential need to move into the debt management part of the discussion.
Whatever the reason may be for seeking out credit counseling or going on a debt management plan, just know that you are not alone and there is help out there. Make sure to do your due diligence when it comes to selecting a credit counseling agency. Also, make sure you completely understand the terms of a debt management plan if you sign up for one. Both are very beneficial but only if you know what’s expected of you and that you can meet the agreement terms every month.
If you have any questions give our nonprofit credit counseling agency a call at 866-699-2227 or visit us online at www.advantageccs.org for more information or to Live Chat with one of our highly trained and certified credit counselors. We’ve been helping consumers get out of debt since 1968 and we can help you too!