Finding a good debt management solution becomes extremely important when your only alternatives are bankruptcy or continuing to miss payments and ruining your credit. If you’re in this position currently, there is a bright side to your cloudy financial sky: a non-profit debt management solution.
This option involves enlisting the help of an organization that exists to help consumers who have gotten into a situation where their debts exceed their incomes every month and they are struggling financially. There are private businesses that offer these services for a very large fee and they have the potential to hurt your credit, but for many people, a non-profit debt management solution is the better choice because there are no large costs involved. Credit counseling with a reputable non-profit is always free.
If you have found yourself in deep debt with no foreseeable way out, then a Debt Management Program might be an option to consider. But, with so many debt management companies out there, it can be difficult to know what to look for when choosing one to work with. However, the first thing you should do is to compile a list of non-profit companies. Such companies have a legal obligation to provide debt education and free credit counseling.
Here are some tips for finding the best non-profit debt management solution for your needs:
Check Their Accreditation –
The National Foundation for Credit Counseling (NFCC) and The Council on Accreditation (COA) endorses and accredits organizations that follow certain high standards and ethical practices. Therefore, it is important to look for such accreditation and membership when choosing a debt company to help you. If a company is not accredited, they may be out to get your money and that is the last thing you want when you are dealing with debt.
Get a Free Consultation –
Reputable debt management companies will always offer a free consultation or a free credit counseling session. A certified credit counselor should go over all of your income, assets, liabilities, and debt to find out where you are financially and how much debt you truly have. They should also offer free advice and relevant information to help you. If they try to rush you into a plan to manage your debt before you understand your current situation and all of your options, then it’s probably time to move on.
Pay Attention to Fees –
Since you are seeking advice about your debt, the last thing you want is to be charged high fees for a service that is supposed to be helping you. You should never be charged high upfront fees or be asked to make “voluntary contributions” to start a program. In order to decide if an organization’s service fees are reasonable, check their monthly maintenance fees, penalties, and minimum monthly payment amounts. The company you choose should offer you their debt management services for a low monthly fee without ever asking for a large upfront sum. If you are uncomfortable with any of the fees, you should keep looking for a company until you find one that charges reasonable fees. A non-profit organization is also a great choice when it comes to fees because they are there to genuinely help you and not to make a huge profit off you. If you fall below a certain set income level your fees can be waived by a nonprofit agency. They truly are there to try and help you get out of debt.
Check References –
You can ask for references or reviews from past clients. This can be especially helpful if you are dealing with a local company. Obviously, all information is confidential. But, if the company gives you any names, then it is safe to assume they were given permission to do so. Check the references and see what others have to say. If you’re dealing with an online company, get on the internet and check reviews for that company on places such as Facebook, Google+, Yelp, Angie’s List, etc. You can be sure if someone had a negative experience with a debt relief company, they will sound off loud and clear in an online review.
Ask for a Contract Template –
Most reputable debt relief companies will put everything in writing in the form of a contract or client agreement. Before you sign up for services, ask the company for a copy of their standard contract which should list all their fees, terms, and conditions. You need to review the contract carefully to ensure the terms are reasonable. Once you are satisfied, you can ask for a personalized contract with terms and conditions that are specific to your unique situation. Never agree to do business with anyone offering to manage your debt without a contract. You can get badly burned that way.
Other Things to Consider –
First, always make sure that the non-profit debt management solution you pick has been accredited by either the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling. These groups oversee the issuance of accreditations for many for-profit and non-profit organizations that offer professional debt management solution services. Be sure that each agency you check out has a current license from one of these groups. Only choose a debt management solution that is provided by a group with up to date accreditation.
Next, remember that the label “non-profit” is easy to use in the debt management solution field, but the title alone is not proof that an organization really is what it purports to be. When you contact a debt management solution service that claims to be non-profit, ask to speak with the owner or a top manager. Ask that person point-blank if their service is truly a ‘charitable organization.’ They are required by law to explain whether they are truly charitable or simply licensed as ‘non-profit’ for tax purposes while still charging clients fees for their services.
Finally, don’t be confused by the terms ‘debt management solution’ and ‘credit counseling,’ which are different practices. Debt management involves the non-profit organization working with your creditors to come up with lower payments and/or a reduction in the total amounts you owe. A credit counseling service stops short of any dialogue between the company and your creditors. It is meant simply to give you advice on how to better handle your own finances and work within a budget from month to month. Let it be known that you cannot sign up for a debt management program without first going through a free credit counseling session. Whether it be done online, over the telephone, or in-person, you must participate in the credit counseling session first.
It’s no lie that being in debt is super stressful. You must remember that you did not accumulate your debt overnight. It probably took you some time to get to where you are and it’s going to take some time to dig your way out.
By calling upon a debt management company, you are taking action to correct your situation. Just do your homework when choosing a company because there are many out there looking to take your money and leave you worse than where you are now. Therefore, keep the above tips in mind and research each company thoroughly.
We hope you’ve found the information in this blog post enlightening. Feel free to give us a call at 1-866-699-2227 or visit us online at www.advantageccs.org to find out more about non-profit Advantage CCS and see our accreditation list, partnerships, past client feedback, success stories, and much more!
Check out our Credit Counseling FAQ page for even more popular credit counseling questions that we’ve answered: https://www.advantageccs.org/credit-counseling-faqs