Debt Help: If you’re not disciplined enough
to create a workable budget and stick to it, can’t work out a
repayment plan with your creditors, or can’t keep track of
mounting bills, consider contacting a Debt Counseling
organization. Many Credit Counseling organizations are
nonprofit and work with you to solve your financial problems.
But be aware that, just because an organization says it’s
“nonprofit,” there’s no guarantee that its services are free,
affordable, or even legitimate. In fact, some Debt Counseling
organizations charge high fees, which may be hidden, or urge
consumers to make “voluntary” contributions that can cause
more money owing.
Most credit counselors offer services
through local offices, the Internet, or on the telephone. If
possible, find an organization that offers in-person Debt and
Credit Counseling. Many universities, military bases, credit
unions, housing authorities, and branches of the U.S.
Cooperative Extension Service operate nonprofit Debt Help
programs. Your financial institution, local consumer
protection agency, and friends and family also may be good
sources of information and referrals.
Reputable Debt Help organizations can
advise you on managing your money and bills, help you develop
a budget, and offer free educational materials and workshops.
Their counselors are certified and trained in the areas of
consumer credit, money and bills management, and money plan.
Counselors discuss your entire financial situation with you,
and help you develop a personalized plan to solve your money
problems. An initial counseling session typically lasts an
hour, with an offer of follow-up sessions.
Debt Consolidation Program: If your
financial problems stem from too much bills or your inability
to repay your debts, a Debt Couseling agency may recommend
that you enroll in a Debt Relief Plan (DMP). A DMP alone is
not Debt & Bill Counseling, and DMPs are not for everyone. You
should sign up for one of these plans only after a certified
Debt Negotiation has spent time thoroughly reviewing your
financial situation, and has offered you customized advice on
managing your money. Even if a DMP is appropriate for you, a
reputable Debt Couseling organization still can help you
create a money plan and teach you money management skills.
In a DMP, you deposit money each month
with the Debt and Credit Counseling organization, which uses
your deposits to pay your unsecured money owing., like your
credit card bills, student loans, and medical bills, according
to a payment schedule the counselor develops with you and your
creditors. Your debtors may agree to lower your interest rates
or waive certain fees, but check with all your creditors to be
sure they offer the concessions that a Debt Negotiation
organization describes to you. A successful DMP requires you
to make regular, timely payments, and could take 48 months or
more to complete. Ask the Debt & Bill Counseling to estimate
how long it will take for you to complete the plan. You may
have to agree not to apply for — or use — any additional
credit while you’re participating in the plan.
Protect Yourself
Be wary of Debt & Bill Counseling
organizations that:
charge high up-front or monthly fees for
enrolling in Debt Negotiation or a Debt Help Program.
pressure you to make “voluntary
contributions,” another name for fees.
won’t send you free information about
the services they provide without requiring you to provide
personal financial information, such as credit card account
numbers, and balances.
try to enroll you in a Debt Relief
Program without spending time reviewing your financial
situation.
offer to enroll you in a Debt Relief
Plan without teaching you money plan and money management
skills.
demand that you make payments into a
Debt Counseling Plan before your creditors have accepted you
into the program
