Investment & Financial Articles
Title: Selecting a Good Credit or Budget Counselor
Author: Paula Langguth Ryan
Article:
Selecting a GOOD Credit or Budget Counselor!
Most of what credit counselors do you can do for yourself. But,
if you're too emotionally involved with your money situation to
create and stick with a plan and negotiate with your creditors
then using a credit counselor may be a good option for you!
Credit or budget counselors, including those who are listed as
being with the Consumer Credit Counseling Service (CCCS) or the
Genus/National Credit Counseling Service (NCCS) are non-profit
organizations that offer free budget counseling and (for a small
fee which is often rolled into your monthly payments), debt
repayment plans.
With a credit or budget counselor, you set up a workable budget
and send one lump sum payment to the credit counseling service
so they can divide the money up among your creditors. Your
budget may seem tight at first, but you will find that you could
be completely debt free within 3 years if you stick to the
repayment plan!
Most credit and budget counselors work with your creditors to
get them to accept smaller payments from you, and attempt to
freeze or lower interest rates and late payment or
over-the-limit fees. In addition, once you've entered into a
repayment plan with the counselor, the harassing phone calls
from creditors will stop. Even if you choose to set up your own
repayment plan, instead of going through the credit counselor,
you can get free budget assistance from them!
If you do decide to us the credit counselor's debt repayment
program, be sure to ask these questions before you sign up:
1. Which of my creditors have worked with you in the past to
reduce payments, or freeze or lower interest and fees? Before
you sign up for a repayment plan, make sure that the counseling
service can help you reduce interest and fees for your
creditors. Not all creditors are willing to negotiate with
credit counselors. If most or all of your creditors are willing
to negotiate, then it may be in your best interest to start a
repayment plan. If most of your creditors won't work with the
credit counselor, then a repayment plan won't work for you. To
be on the safe side, ask the credit counselor for a list of the
creditors that have worked with them or have them put in writing
which of your creditors they have successfully negotiated with
in the past.
2. When will my creditors be paid? Some counseling services have
a set date each month when they take money out and apply it to
your debts. Sometimes, creditors wind up being paid after their
due dates. Make sure that the counseling service will work with
your creditors to change the due dates or will set up your
payment schedule based on when you get paid. The best services
will work around your payday and your bills' due dates.
3. Can you take money electronically out of my checking account
or will I have to send you a certified check or money order each
month? You're much more likely to stick with a repayment plan if
making that single payment to the counseling service is a
"
no-brainer." If you're pressed for time and don't think you can
get to your bank each month to get a certified check, make sure
the counseling service will take money out of your account
electronically.
4. How often can I see statements of my accounts? Your counselor
should send you at least monthly reports on your progress. The
statements should show you how much of your payment is going
toward interest, how much toward the minimum payment and how
much toward the counselor for his/her services.
5. Will I always deal with the same counselor, or at least get a
live person on the phone when I call during regular business
hours? How long does it take for you to return phone calls? Make
sure you're comfortable with the answers you get here, and that
you're comfortable with the people you might be dealing with.
After your free budget counseling session, call your counselor
once or twice with questions you have about the budget paperwork
to make sure that you don't have a problem getting your
questions answered and your phone calls returned.
There's no obligation or payment due to any good credit
counselor until after you've determined what your monthly
payment would be under the plan and you've decided to join their
program. I encourage you to explore all your options and then
pick the one that makes you feel most comfortable
About the author:
Paula Langguth Ryan is the author of "Bounce Back From
Bankruptcy" and "Giving Thanks: The Art of Tithing" and a former
credit counselor, financial editor and ghostwriter for national
finance magazines. Visit her site at
http://www.artofabundance.com for a free monthly Art of
Abundance e-zine or email paularyan-70559@autocontactor.com for
a free e-book of Giving Thanks.
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