The best magazine
- Credit management companies help individuals budget.budget, payment allocation image by Kalani from Fotolia.com
Over the last decade, credit counseling has become particularly important in America. As consumer debt mounts, more creditors have enlisted lawyers and experienced debt collectors to help recoup some of their losses. Consumers inundated with phone calls, letters and impending court dates have fueled the credit management and debt recovery industry. Credit counselors help individuals develop budgets, set financial goals and begin debt-management plans. Some people may agree to settle their debts at a reduced rate by paying a couple of lump sum payments, while others agree to pay the original debt in full, making small, consistent payments. - Learning to live without credit is a benefit of debt recovery plans.consumer girl image by Lev Dolgatshjov from Fotolia.com
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. - Sometimes agencies that promise to help actually hurt consumers more.bank statment and cut credit card image by Warren Millar from Fotolia.com
One of the dangers of credit management and debt recovery is that many Americans fall for scams by "debt settlement" companies. The Consumer Federation of America warns that these settlement companies are different because they advise consumers to stop paying creditors. Each month, consumers pay the settlement company, which holds onto the money until it can make a lump sum settlement with the debt collectors. Unfortunately, this method hurts people's credit, as the delinquent payments keep racking up, and hidden fees are charged by at least 20 percent of the companies that offer "free" credit counseling and debt management. - Consider credit counseling if you have numerous debts in collections.credit card image by Christopher Hall from Fotolia.com
The Federal Trade Commission recommends seeking credit counseling if you are not disciplined enough to make a budget and stick to it. Seek help if you previously tried to negotiate lower payments or different due dates with creditors to no avail. If you've lost track of the bills you need to pay, then seek help. If you are suffering from insurmountable debts that you cannot repay, you can enroll in a debt management and debt recovery plan where you deposit money into a separate account to pay off your creditors with regular, timely payments. - Find someone who will teach you money management skills.photo checkbox credit image by Aleksandar Radovanovic from Fotolia.com
The Internet, universities, military bases, banks, credit unions, mortgage lenders, consumer protection agencies, friends and families are all good sources for referrals to a reputable debt recovery program. Remember, just because a place is "non-profit" does not mean it is not profiting off you somehow. The FTC warns to be wary of organizations that charge high upfront fees or monthly fees to enroll you in a credit management and debt recovery plan. Avoid counselors who offer services without reviewing your financial history and asking for your credit account information. Look for counselors who provide lessons about budgeting and money management.
History
Benefits
Dangers
When to Get Help
How to Get Help
Source: ...