Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills $200+ |
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Debt > Credit Counseling > What is Credit Counseling? |
Organizations who help consumers with debt problems usually refer to themselves as credit counseling services. The first credit counseling service was started by the credit card industry, who wanted a way to limit the amount they were having to write off each year as uncollectible debt and keep debtors paying for a longer period of time without filing bankruptcy. This is why some consumer groups argue that credit counseling services are nothing more than nice collection agencies working for the credit card industry. Most credit counseling services register with the IRS as non-profits, which gives them considerable tax benefits. Unfortunately, the public seems to equate non-profit with charity, which isn't at all true. Therefore, don't let the fact that a credit counseling service is a non-profit mislead you into thinking that it is a charitable organization looking after your best interest. Even though reputable credit counseling services provide good credit counseling and debt management advice to their clients, all of them, without exception, are working for the creditors and the banking industry from whom they derive almost all of their profits (the credit counseling service gets to keep a portion of the amount they collect from their clients). What type of debt is covered in credit counseling? Credit counseling services can typically help you with unsecured debt, such as credit cards (the most common type of debt); collection agencies; professional service bills (such as unpaid medical, dental, and attorney bills); unsecured bank loans and defaulted auto loans (amount still owed after repossession); IRS tax debt; student loans; utility (telephone, water, cable) bills and unpaid rent. You cannot get out of paying criminal fines, child support and the like. Secured debt, such as your mortgage and auto loans, are not part of the repayment plan and you must continue paying this debt as agreed. If you have defaulted on these loans, the lenders will simply repossess the collateral; however, some credit counseling services can contact these lenders on your behalf and help you work out a plan to pay what is in arrears and avoid foreclosure or repossession. |
What is Credit Counseling? |
Debt > Credit Counseling > What is Credit Counseling? |
Related articles: |
Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills $200+ |
