Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills $200+ |
Debt > Credit Counseling > Questions you should ask a credit counseling service |
Debt Management: Questions you should ask a credit counseling service If you decide to seek credit counseling, don't just assume that every agency is a good one just because it is a non-profit. Some credit counseling companies are more ethical that others, however, never forget that most of them are in this business because it is highly profitable. Ask alot of questions and don't believe all the hype that will be thrown your way. Specifically, get answers to these questions: (1) How does company derive its income (fees, contributions from creditors, grants)? (2) How much training do the counselors have? (3) How much time will I have discussing my problems with a counselor? (Should offer at minimum 90 minutes of counseling) (4) What is involved in the counseling process and what information do counselors use to evaluate my situation? (5) What are your fees for each service and what is the most I will have to pay? (A good sign that a company is not a good choice is if they are mainly concerned with you sending in an enrollment fee right away.) (6) Will I be able to access my account information on a regular basis or perhaps online? (7) Make sure you know which debts will not be covered in the plan before you sign up since some creditors do not participate in these plans. (8) What guarantee is there that they will pay your creditors and that they will do it before the due date (this has been a serious problem in the past, so much so, that the FTC is currently investigating more than 50 counseling services for failure to pay creditors) (9) Are they going to help you work out a budget and learn some basic debt management skills? (10) Ask them if they are licensed. (11) Ask them if counselors are paid based on the number of new clients they sign-up (if so, go somewhere else) Read the contract thoroughly before signing it as you might find there are hidden sign-up fees. For example, a common complaint consumers have with credit counseling services is that they claim they were never told that their first two payments would not go to creditors; instead, they would go to the credit counseling service. Make sure this doesn't happen to you. How Do I Find a Reputable Credit Counseling Service? The consumer group who publishes Consumer Reports magazine recommends that debtors find a credit counseling services through their area Yellow Pages. Specifically, they recommend counseling services who are members of Consumer Credit Counseling Services (CCCS) which has a reputation of offering solid, affordable (or free) in-depth counseling. Find a local CCCS affiliated agency and receive an hour of free, no obligation credit counseling before you decide to sign-up with any credit counseling service. You can also select a credit counseling service from the list of approved credit counselors who are allowed to offer counseling services to those preparing to file bankruptcy. Don't want to sign-up with a credit counseling service or file bankruptcy? Consider negotiating directly with unsecured creditors and debt collectors for alternate repayment plans. We offer a downloadable Debt e-book that includes background information and sample letters. |
Debt > Credit Counseling > Questions you should ask a credit counseling service |
Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve credit rating and reduce monthly bills $200+ |
