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10 ways to
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10. Talk To A Credit Counselor.
If you feel you can't negotiate with creditors on your own or your debts are just getting
out of control, there are many credit counseling services out there that can help you. One
of the best known is the National Foundation for Consumer Credit (NFCC). The NFCC is
a network comprised of 1450 non-profit community organizations (most use the name Consumer
Credit Counseling Services or CCCS) spread across the United States.
Certified counselors at CCCS will examine your financial situation, help you develop a
spending plan, or just answer general questions about money management. If you have severe
debt and your situation warrants, you may be able to enroll in their Debt Management Plan
(DMP). In this plan, you agree to deposit funds into a CCCS account each month. CCCS
distributes payments to creditors according to the proportion of debt owed to
each. They also contact your creditors to ask for lower interest rates, lower monthly
payments, and waived finance charges. It will take approximately 48 months to repay debts
through the DMP and when you have completed your payments, CCCS will help you re-establish
credit.
A few things you should know when dealing with CCCS:
- CCCS is funded with voluntary contributions from creditors.
- Up to 15% of your DMP
payments to creditors will come back as voluntary contributions to CCCS. Your accounts
with creditors, however, will always show 100% payment.
- CCCS and your creditors will
discuss many options but they'll never mention bankruptcy as one of them.
- If you enroll in the Debt
Repayment Plan from CCCS, make sure you follow through. Missed payments or reluctancy to
keep up with the plan may show up on your credit report as an uncollected debt. Not good.
If there are no CCCSs in
your area, the NFCC recommends asking the following questions to help choose a qualified
credit counseling service:
- Is this agency a non-profit
organization?
- How much will these services
cost?
- Are agency services
confidential?
- What counseling services are
offered?
- Are the counselors
qualified?
- Are budget and credit
education opportunities offered?
- Will my funds be protected?
- Is the agency accredited?
If your debts are too high
to make the CCCS plan work or you've exhausted all other options, then you may want to
explore bankruptcy as a last resort.
To contact the NFCC:
National Foundation for Consumer Credit
8611 Second Avenue (Suite 100)
Silver Spring, MD 20910
1-800-388-2227 (24hr automated listings)
Or look under "Credit and Debt Counseling" in the business pages of your local
telephone directory. The NFCC also has a member office locator at it's web site that will allow
you to find the NFCC member organization nearest you.
Other Resources:
Debt Counselors of America® (Debt Counselors®) is the nation's first non-profit,
Internet-based credit and financial counseling organization. They help people to overcome
their money troubles through education and special programs. Founded in 1994, Debt
Counselors has served more than three million consumers through their Web site, GetOutofDebt.org. You can also reach them through
their toll-free number, 1-800-680-3328.
Note:
Stay clear of credit repair agencies, clinics, or debt doctors who claim they'll fix your
bad credit rating. For a large fee, they promise to remove negative credit information
from your file or create a new credit history for you. Legally, this is not possible. They
are a scam, so move on. The only way to re-establish your credit are time and an improved
credit record. There are no quick fixes. No magic tricks.
Credit and Debt
Calculators:
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• Should I pay off debt or
invest in savings?
• What will it take to pay off my balance?
• Should I consolidate my
debts?
• How Much Am I Spending? |
