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Debt Counseling
When you went to high school did you ever take a class
in “credit card debt” or “personal financial planning?” Few
of us have. The sad truth is that many Americans were never schooled
in the skills and techniques needed to understand and manage consumer
debt. Unfortunately, this lack of a basic knowledge of finance and credit
can end up being very expensive in the long run.
What is Debt Counseling?
There are many different companies that offer services under the general
category of “Debt Counseling”. These companies offer education
in budgeting or personal financial management. Some take it a step beyond
education and
work with you to create a plan and timetable to get you out of debt.
Debt Counseling Can Lead to Action
If an individual needs more direct help, some counseling companies have a
special plan, called a Debt Management Plan or DMP, whereby the individual
sends
ONE check each month to the management company, which uses the money to pay
all the monthly creditors.
Debt Counseling Pros and Cons
It is important for you to know that if you use a DMP, the debt counseling
company will charge you a fee and the words “managed by a credit
counseling company” will appear on your credit report. This tells
the credit industry that you have having trouble and can be a red flag
in your financial future. Also, if you use a DMP and fail to make your
monthly payments, it will show up as an uncollected debt on you’re
your credit report, and stay there for seven years! Still, using a debt
counselor can benefit individuals who are in serious debt trouble and
who not capable to taking helpful action on their own. Are you a candidate
for debt counseling?
You may be a candidate for a credit counseling service if you:
- Have trouble meeting your monthly financial obligations
- Have multiple credit cards with long outstanding balances
- Honestly do not understand why your bills are so high
- Have difficulty establishing and living on a budget:
If you decide that a debt counselor may be helpful to you,
here are some tips to make sure you find the right one:
- Check for consumer complaints with your local attorney general’s
office and the Better Business Bureau
Check all fees before you sign on. Fees can vary greatly.
Beware of companies that don’t want to talk about fees or that
fail to give you straight answers.
- If you agree to a Debt Management Plan, make sure your read it
first and understand all the details
- Ask to speak to satisfied customers who have used the service
There’s no cost or obligation.
To find out more about this or any of the other alternative solutions,
please complete this simple form. Or call toll
free Monday thru Friday 12pm to 6pm EST at (800) 583-2043
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