Credit Card Debt Consolidation Company

What is Credit Counseling and is it Right for Me?

Are you unable to make your monthly minimum payments on your credit cards?

Are you late paying any of your bills?

Have you tried to contact your creditors? Have those efforts brought no solution, or a solution that you still could not meet?

Are you being chased down by creditors and collection agencies? Avoiding phone calls, and deleting emails?

Do you have a steady, reliable income stream, but it is simply not enough to make those minimum monthly payments?

Can you reasonable restructure your debt and pay it off within about 2-5 years? If you are unable to meet that timeframe, you may be better off opting for bankruptcy.

What is Credit Counseling?

In a nutshell, credit counseling is a process through which consumers are offered education about how to deal with their debt, how to avoid accumulating additional debt and often involves negotiating with creditors to create a debt management plan. A DMP is a plan in which the consumer repays their debt on a repayment schedule. Often, DMPs include the ability to reduce payments, interest rates and fees. After the DMP is created, the creditors close the consumers’s credit accounts to cut off the consumer’s ability to continue to accumulate debt with that creditor.

How do DMPs help a consumer with overwhelming debt?

DMPs can be advantageous for the consumer struggling with debt as the credit counseling agency helps to consolidate the monthly payments of the debtor into one single payment. Typically this payment is less than the sum of each of the individual payments made each month by the consumer. In fact, many consumers find that after having tried to negotiate this on their own, it is only with a DMP that the same credit card bank will now accept this lower monthly payment.  

DMPs are also helpful to the consumer as they may also achieve reduction in the interest rates they are charged by their creditors. Some consumers who are behind on credit card payments find themselves paying interest rates in the upper ranges of 20%, close to 30%! By joining a DMP, consumers can find themselves with annual percentage rates lowered to 10% or less, sometimes even eliminating the interest charges all together! This justifies the claims of many counseling agencies that their customers will be debt free in a short range of time as when the interest rates are dramatically lowered, the consumer is able to pay the debt off more quickly. Note that if you are simply looking to reduce your interest payments but you are current with your accounts, you probably should not look into a DMP as the creditors may carry that debt as "past due" in exchange for the lowered interest rate.

DMPs also help customers’ accounts that have become delinquent to a current status and help to impact their credit rating over time. This is also known as "curing" and account or "reaging" the account. The consumer making the payments dictated by the plan on a consistent basis will have these accounts reported to the credit bureaus as current. This, however, does not simply erase the past delinquencies. But with time and the continued payments with the debt management plan in place, the consumer will begin to rebuild a more positive credit history. Participation in a DMP does appear on a consumer’s credit report, and it can impact the consumer’s ability to obtain home or car loans. Some lenders will see this as a negative, as it can indicate that a consumer has not managed their debt well. On the other hand, other lenders can see it as a step in the right direction as it can also indicate that the consumer is taking care of their debt obligations and may be worth the lending risk.

Did you know that Credit Counseling is a requirement for filing for bankruptcy?

Credit counseling is now a requirement for any consumer filing for bankruptcy, as per the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. To meet this requirement, the consumer must complete a program with a nonprofit consumer counseling agency with at least one counseling session. Furthermore, they also have to complete a post-filing education credit counseling session before their debts are fully discharged.

What do I need to know about Credit Counseling Agencies and the negative statements about the industry?

Credit counseling has come under a lot of scrutiny lately with charges that consumers have paid hidden fees, excessively high fees, poor service and many other complaints. Many feel that the agencies take the sides of the creditors more often than the consumers. There are also charges that credit counseling agencies hire employees with little to no formal credit counseling training. So, you are putting your financial future in the hands of an employee who may have no more knowledge financial management than you do!

Beware of any agency that asks you to pay high upfront fees. They will claim to be "debt settlement" specialists and they tell consumers that they will negotiate their debt to "pennies on the dollar", we have all seen the ads and commercials. This is typically NOT a legitimate claim, and by the time they take your upfront fee, and the fees of thousands of others, they have enriched themselves, and preyed on consumers desperate for debt solutions.

While you may be desperate and want to hear postive, hopeful news and advice about your debt, do not fall prey to the con artists that make unrealistic promises. A legitimate credit counseling agency will tell you all of the details of how you and your credit will be impacted, even with the DMP. Make sure that they are accredited, and you can check that through the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.

Do your due diligence and you can find a reputable Credit Counseling agency that will help you understand the process realistically, charge appropriately, truly do what they say, and assist you in your Debt Management Plan. This can be a viable alternative to bankruptcy, and get your on a path of financial success and security and freedom from debt in the future.

Credit Counseling Corporations and Credit Counseling Resources will offer information and updates on how credit counseling may be the right fit for you, and how you can work with a reputable credit counseling agency to your advantage.   While we do not offer credit counseling services, we will do everything possible to make sure that you can make an informed decision with the information that we provide to you.  This also does not constitute legal or financial advice.  If you are in need of legal or financial advice, it is always best to take the information you have gathered to an attorney or financial advisor for their input, interpretation and possible legal representation.

There are many options to help consumers struggling with debt and to manage their everyday finances.  Here are some of our recommendations, as well as a brief description of each program and how they may be able to assist you while you are struggling with your debt, trying to avoid bankruptcy and attempting to repair your credit.

Click here for Lexington Law

Lexington Law helps consumers remove negative items from their credit reports, and also assists consumers with improving credit scores to quality for a big ticket purchase, such as a home loan.   Your credit report determines a great deal of your financial future, see how Lexington Law can assist you.

Click here for CuraDebt 

CuraDebt offers consumers Debt Settlement Services, Debt Negotiation Services and Debt Consolidation Services.  CuraDebt has a proven track record, and is a respected consumer debt settlement company, and is a member of the BBB.

 Click here for Care One Credit 

Care One Credit Counseling is nationally recognized for their services that truly lead the industry in helping consumers get out of debt the smart way.  If you are overwhelmed by debt, Care One wants you to know that you are not alone, they have helped almost 5 million people in your situation and want to help you.

The Credit Exchange is the world’s leading debt consolidation and credit services program for consumers online.

Safe Online Cash provides customers with a quick and easy process to apply for a payday loan. The goal is to make it as simple as possible for customers.  While we do not want to advocate recklessly adding debt to your current financial situation, there are times that consumers are in need of a payday loan to cover emergency expenses.  Safe Online Cash makes that easy, convenient, secure and discreet.

The Silver Prepaid MasterCard provides a legitimate bank alternative to the millions of consumers who cannot get a credit card, who do not wish to accumulate debt on a credit card, consumers who are tired of paying overdraft fees or do not have a bank account. We help cash paying individuals avoid check cashing fees and help them get their money quicker using direct deposit. Our direct deposit can make getting your company, social security, disability check directly to your card quicker.  No minimum balance required. Our MasterCard card users can get cash from any ATM and can be used for online purchases and other places where MasterCard is accepted.

Credit Card Debt Consolidation Company presents the following information regarding how to evaluate credit card debt consolidation and the best company for you.  You do need to be cautious, unfortunately, there are all too many scam artists targeting consumers who are having issues dealing with and juggling their credit card debt. 

Doing business in the modern world pretty much requires a credit card. Unfortunately for many of us, credit cards don’t usually come with simple guides on how to use them appropriately. It only takes a few unwise decisions or a little bad luck in the job market to find yourself struggling to stay afloat in a sea of credit card debt. When this happens, you need to evaluate your options and find a way to become solvent again. One of the most popular solutions these days is the credit card debt consolidation loan.

The main problem with this is no different than the main problem with anything that becomes trendy. You have to figure out which companies offering credit card debt consolidation loans are trustworthy and competent. Some are out to make quick money, while others are in business for the long run. You need to beware of companies that drop the names of big companies they’ve dealt with instead of standing on their own reputations. Check with the Better Business Bureau before doing business with a company offering credit card debt consolidation.

Some companies will, for example, target those who tend to have trouble managing debt for really bad loans that will put them deeper in debt at very high interest rates. Instead of consolidating all of your loans into a single, manageable loan, these companies will consolidate all of your loans into an outrageous, high-interest loan with all sorts of hidden penalties and fees. They make huge profits on these loans without doing anything illegal, although they do act with questionable ethics.

A good debt consolidation loan provider will not increase what you owe and it will not encourage you to take on more debt while you’re still trying to pay what you owe now. In fact, many of these companies can work with you to get your credit card companies to slightly lower the amount you owe in exchange for the lump sum payment from the credit issuer. They will pass on most of this savings to you, making their money from the manageable interest rates they charge you. They will discourage you from using any kind of credit until you work your way out of the debt you’re drowning in right now.

You should be very wary of credit card debt consolidation that uses the equity in your home to secure the loan. While there are times when this is a good option because it gets you lower interest rates, in most cases it should be a last resort. And, taking out a mortgage on your home should only be done if you are sure you’ll be able to make the payments. After all, you’re putting your home at risk. If you still owe money on your current mortgage, however, you may be able to get good terms on a home refinancing with extra cash to pay off your credit cards without adding any risk to your mortgage.

Most people, particularly those who have never had trouble with debt in the past, can get a credit card debt consolidation loan without putting up any collateral. This is important for those who suddenly find themselves in a short term debt bind because of a job loss or an unforeseen emergency. The key is to shop around and check out the credentials of any lender you’ll be working with to get the consolidation loan.

Author: Thomas P Smith

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