Credit Counseling Vs Debt Repayment

[ Bookmark this page! ] [ get HTML Version ]

How to Find and Fix Credit Rating
I find that if you try and fix your credit rating you can do it better than anyone else. Fighting your way out of the credit jungle ensures at least one thing. You won't do it again.

All of us make mistakes. We shouldn't have to suffer for the rest of our lives just because of a bad patch. One thing is for certain. If you are going to dig yourself out from under, you'll have to take pla... Read credit counseling article



Credit counseling - Recovering from Bad Credit
I have seen the advertisements and cringe - "Let us fix your damaged credit", "Don't file bankruptcy, let us help". I am sure you have not only seen them but if you have been in financial trouble you have probably thought about calling a credit counseling service for assistance.

You might as well wreck your car and collect the proceeds to repair your own credit while recuperating.
... Read credit counseling article



Credit Counseling Vs Debt Repayment
In understanding how credit counseling may affect your credit status, it is important to know the differences between credit counseling and actual debt repayment programs.

There are definite differences between credit counseling and debt repayment plans in regard to long-term effects. With credit counseling, there is no signed commitment, none of your accounts are affected by the agency itself, and you retain total control of how your debts are paid and when. In addition, credit counseling in no way affects your credit rating and does not show up on your credit report. But because there is no signed commitment, the agency must leave the repayment of your debt in your hands, which may leave you exactly where you started-overwhelmed with the burden of going it alone.

With a debt repayment plan, your credit status may be affected by the plan itself. Creditors may report that an account is in a debt repayment plan, that some payments (if any) have been missed, or that there are write-offs or other concessions that have been made to help reduce your debt to a workable amount. Under the Fair Credit Reporting Act, this accurate information about your accounts can stay on your credit report for up to seven years. In addition, your creditors will continue to report information about accounts that are handled through a debt repayment plan. However, if you can avoid filing bankruptcy, a debt repayment plan may be worth the trouble. Remember, write-offs and late payment notations may stay on your credit report for seven years-a bankruptcy can stay on for up to ten and is a matter of public record as well. This means that in addition to having individual account notations, you will also have the notation of the bankruptcy listed separately on your credit report.

Bookmark this page | Search this site | E-mail to a Friend



Credit counseling - New law sends debtors to credit counseling

Separated from her husband and struggling to buy food and other necessities for herself and two daughters, Bridget Glover watched in horror as her credit card bills mounted. She thought filing for bankruptcy would be the only way out.

"I even got second jobs, but that wasn't enough," recalled Glover, a benefits coordinator from Wheatley Heights, N.Y. "Every time I had to pay bills, I would pull out my checkbook and cry. I couldn't answer the phone because I knew it was bill collectors."

Instead of bankruptcy, Glover sought help from a nonprofit credit counseling agency and worked out a debt repayment program. Three years later, she's nearly finished; her next step will be applying for a mortgage for a new home.

Stories like Glover's are a reason nonprofit credit counselors are being given a greater role in the bankruptcy process.

Under a new federal bankruptcy law that takes effect Oct. 17, debtors must take part in a credit counseling session in the six months before filing bankruptcy applications, paying as much as $50 for a 90-minute session. The law also mandates that many complete a financial education course before their bankruptcies are final, and some of these courses will be handled by credit counselors as well.

The counseling requirement is expected to double to 3 million the number of Americans seeking help each year from nonprofit credit counselors, straining an industry already grappling with funding problems and investigations into whether some agencies abused their not-for-profit status.

Joel Greenberg, president and chief executive officer of Novadebt in Freehold, N.J., which helped Glover, said it remains unclear how many people will be able to avoid bankruptcy through counseling.

"We expect that many of these people will be in very deep trouble by the time they come to us," Greenberg said.

And many financially troubled consumers have never developed money skills, said Howard Dvorkin, president of Consolidated Credit Counseling Services Inc. in Fort Lauderdale, Fla.

"For many of these people, this could represent the most time they've ever spent in their lives focused on their personal finances," Dvorkin said.

Counselors will help them analyze their spending and work out a budget. Some people are likely to need the counselors' help in negotiating with creditors to get a manageable debt repayment program going.

Still, Dvorkin acknowledged, "it's going to be a huge challenge to deliver these services effectively and efficiently" to those coming in just one step ahead of bankruptcy.

Ideally, credit counseling should be done in face-to-face sessions. But because of the increased load, the new law also will allow phone counseling and Internet counseling.

This has led some consumer advocates like Liz Pulliam Weston, author of "Deal With Your Debt," to suggest Americans facing bankruptcy will be subjected to "drive-through counseling" that will do little to re-educate them about good spending and borrowing habits.

"If you want to change attitudes and outcomes, you need face-to-face contact," Weston said. "And you need time."

But that kind of counseling can be expensive, and many of the counseling agencies already have funding problems. Credit card companies and other lenders have reduced the amount of money they give agencies that work out repayment programs for debtors, and the agencies also are competing for donations with other worthy nonprofits.

Susan C. Keating, head of the National Foundation for Credit Counseling in Silver Spring, Md., an association of nonprofit counselors, said she believes the law "is recognizing publicly for the first time the value of counseling and education for consumers."

The intent, she added, is for in-depth counseling "so that ultimately the consumers will be able to make a more-informed decision about what route is best for them."

At the same time it's preparing to deal with the new law, the counseling industry is grappling with several investigations. The Federal Trade Commission has gone after a number of agencies for deceptive practices, including failure to pass on money they collected from debtors to creditors. The Internal Revenue Service has pulled the tax-exempt status of at least four agencies that were actually operating for-profit shops and is reviewing dozens more.

Travis Plunkett, legislative director of the Consumer Federation of America advocacy group in Washington, D.C., said that since the Executive Office for U.S. Trustees must certify the credit counseling agencies involved in bankruptcy cases, "only agencies on the up and up" are expected to be involved.

The U.S. Trustee Program, a division of the Department of Justice, is responsible for overseeing bankruptcy cases. The list of agencies that have been approved so far is on its Web site at www.usdoj.gov/ust, and also will be available to consumers from bankruptcy court clerks.

Plunkett said he's concerned about what the mandatory counseling will cost debtors.

"We don't want this credit counseling requirement to be yet another hurdle that consumers who really need bankruptcy relief have to jump over to get it," Plunkett said.

David C. Jones, president of the Association of Independent Consumer Credit Counseling Agencies, based in Fairfax, Va., said the regulations require that fees be reasonable and that the U.S. Trustee Program has suggested that up to $50 for the required 90-minute session would be acceptable.

"But we are nonprofits, and that means we also have to accept anybody who can't afford to pay," Jones added.

There are some who remain skeptical of the whole concept of mandatory counseling and education, including financial planner Ric Edelman, author of "The Truth About Money."

"Does it help to send people to drunk driving class after they're arrested for DWI (driving while intoxicated)?" Edelman asked.

"These things can be helpful when people are there voluntarily," he added. "But if they're mandatory, they may consider it punitive ---- something to get through ---- and just put in the time."-




Top rated articles for credit counseling

1. Choosing a Credit Counseling Service
Are you way over your head in debt? For many struggling to pay off their debts, self-help sometimes is not a viable option. Here are some pointers for choosing the best credit counseling service.
... Read credit counseling article

2. Consumer Reporting Agencies
Laws were made to help people bring justice to their lives, and it is the violation of these laws what makes a person go through harsh time. The Federal Trade Commission (FTC) designed the laws that a... Read credit counseling article

3. Credit Repair Service
We all are looking for the fastest way to get the things we want. People charge up their credit cards because it is quick and seems painless at first. Those with debt and credit problems want to fix i... Read credit counseling article

4. Credit Score Factors and How to Dispute Bad Credit
Do you often have too much month left at the end of your money? While you strive to pay your monthly bills on time, computers are keeping a close watch on your performance.

Automated progra... Read credit counseling article

5. Repairing Your Credit - With Or Without Credit Counseling
Debt counseling services are sponsored by most creditors and most are nonprofit organizations, though some are not. You must have a source of income before you can contact a debt counselor service, af... Read credit counseling article

6. Choices with Bad Credit
As a matter of fact, even personal loans for people with bad credit cannot be obtained easily. However, since they are the only solution for many, it is imperative to learn how to get approved. Bad cr... Read credit counseling article

7. Consumer Credit Counseling
What Is Consumer Credit Counseling?
Consumer Credit Counseling is a program that has been around for nearly 60 years and helps educate people how to pay debts and better manage their money in the... Read credit counseling article

8. Bad Credit Score - Get The Cash You Need
Bad credit cannot be turned into good overnight. So it is better to take specialised loans like bad credit secured loan than to wait for the credit score to be good and take traditional loan. This loa... Read credit counseling article

9. How To Repair Your Bad Credit
Today, good credit is essential in our society. Any person who has bad credit, is probably finding himself at a serious disadvantage unable to buy a home, obtain credit cards, buy a new car and other ... Read credit counseling article

10. Using PrePaid Cards for Credit Repair
It's getting tougher and tougher to buy anything without plastic these days. Since some people have a bit of trouble, and need credit repair, they turn to their only alternative, which is the pre-paid... Read credit counseling article


Credit Counseling and Debt consolidation services in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,



Credit Counseling Vs Debt Repayment
Debt consolidation services in Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,

Debt consolidation services in Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin and Wyoming.

Add website or submit URL link of your site to 1000 free directory
50 Flint Hill credit counseling - Washington DC 49 Flintstone credit counseling - Washington DC 48 Forestville credit counseling - Washington DC 47 Fort Ashby credit counseling - Washington DC 46 Fort Belvoir credit counseling - Washington DC 45 Fort Loudon credit counseling - Washington DC 44 Fort Valley credit counseling - Washington DC 43 Fort Washington credit counseling - Washington DC 42 Franconia credit counseling - Washington DC 41 Frederick credit counseling - Washington DC 40 Fredericksburg credit counseling - Washington DC 39 Front Royal credit counseling - Washington DC 38 Frostburg credit counseling - Washington DC 37 Funkstown credit counseling - Washington DC 36 Gainesville credit counseling - Washington DC 35 Gaithersburg credit counseling - Washington DC 34 Gapland credit counseling - Washington DC 33 Garrett Park credit counseling - Washington DC 32 Garrisonville credit counseling - Washington DC 31 George Mason credit counseling - Washington DC 30 Germantown credit counseling - Washington DC 29 Gerrardstown credit counseling - Washington DC 28 Glen Echo credit counseling - Washington DC 27 Glengary credit counseling - Washington DC 26 Glenn Dale credit counseling - Washington DC 25 Goldvein credit counseling - Washington DC 24 Gore credit counseling - Washington DC 23 Great Cacapon credit counseling - Washington DC 22 Great Falls credit counseling - Washington DC 21 Great Mills credit counseling - Washington DC 20 Green Spring credit counseling - Washington DC 19 Greenbelt credit counseling - Washington DC 18 Greencastle credit counseling - Washington DC 17 Greenway credit counseling - Washington DC 16 Hagerstown credit counseling - Washington DC 15 Hague credit counseling - Washington DC 14 Halltown credit counseling - Washington DC 13 Hamilton credit counseling - Washington DC 12 Hancock credit counseling - Washington DC 11 Harpers Ferry credit counseling - Washington DC 10 Hartwood credit counseling - Washington DC 9 Hayfield credit counseling - Washington DC 8 Haymarket credit counseling - Washington DC 7 Hedgesville credit counseling - Washington DC 6 Helen credit counseling - Washington DC 5 Herndon credit counseling - Washington DC 4 High View credit counseling - Washington DC 3 Hillsboro credit counseling - Washington DC 2 Hollywood credit counseling - Washington DC 1 Hughesville credit counseling - Washington DC