Over the last two decades, consumer debt has been skyrocketing and so have the fortunes of the ‘so-called’ consumer credit counselors. How many times a day do you see an advertisement that promises to help you “pay only a fraction” of your accumulated credit card debt? They’re hard to miss because they are everywhere! The question is whether all these promises are just sales pitches to get you to pay for something you could get for free. This article is intended to help you make wise decisions and avoid being defrauded by those who would prey on your fears.
If you’re watching late night television and start seriously contemplating using the credit counseling agency that advertises (between the monologue and the first guest), take a moment and ask yourself some questions. Are you really in trouble financially? Are you having trouble making credit card payments? Do credit collection agencies drive you crazy with phone calls? Are you consistently late making regular payments (utilities, house payment or rent, etc.)? Is it because you simply don’t have the money? Have you spoken to your creditors and tried to work out payment arrangements you both can live with? Heard nothing but laughter on the other end of those calls?
If the answers to the foregoing questions are no, why would you want to spend time and money having a “credit counselor” negotiate a bill payment plan when you are already paying your debts? While you may have significant debt, if you’re already working a successful plan, why spend money to rework it?
If, however, you answered yes to one or more of those key questions, and might find it useful to deal with a credit counseling agency, how do you find a reputable one? You can start by talking to your local credit bureau. First look at verifying whether your potential counselor is accredited by one of the national agencies (Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling). Legitimate agencies will be affiliated with one of these associations. You can also go to these agencies’ home pages and search for affiliated counselors.
When you have identified some agencies you think might help, investigate them. Look at their websites and give them a call. Kick the tires and make sure you’re not talking to an agency more interested in fleecing you than freeing you from debt. A few things to look out for are:
If you find that you do need to work with a credit counseling agency, be aware that different creditors view counseling differently. Some may tell you that bankruptcy is a far easier and less painful way to settle your debt. While that may sometimes be true, the fact is most creditors are far more willing to take a chance on people who actually pay their debt than people who try to avoid their obligations. In the current economy, most lenders view it as a plus when debtors try to work with them directly.
If you are having trouble making ends meet, don’t go for a quick fix that could simply put you deeper in the hole. If you think you need the services of a credit counselor, make a thorough search of reputable agencies before you settle on one. Don’t forget, your problems can often be solved by developing and following a sound debt repayment plan. If you need help structuring one, give us a call. We’ll be glad to help.
Have a wonderful April!