debt counseling - unsecured debt management and settlement.
Can't get your bills and personal debt under control? Request professional debt counseling, debt management, unsecured debt consolidation or negotiate debt settlement.
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Credit Counseling versus Debt Settlement
Both programs offer consumers a way to repay their unsecured debt. To decide which program is best for you, apply for both and review each one's plan specifically designed for your unique circumstances. Read below to review the differences between debt settlement and credit counseling:
Debt settlement may impact your credit; however, if your credit is already bad and if you don't think you'll be able to endure the longer debt repayment plan of credit counseling, then debt settlement may be best for you.
With credit counseling, you have the opportunity to improve credit if you can stick with the program. Debt counseling typically takes longer to repay debt or has a much higher monthly repayment plan.
Get your finances under control without credit counseling:
Look through your checkbook, statements, and receipts. Start gathering information on where, and how much money you spend in various categories on a weekly or monthly basis.
Just knowing where your money goes is a terrific education in and of itself. You will be amazed, and learn things about yourself you didn't realize. And right away, you'll get some great ideas on how to curb spending. This is the first step towards do-it-yourself credit counseling.
What is Credit
Counseling: (also called debt counseling or debt management): Your debt is combined into one lower monthly payment to make it easier for you to meet your financial obligations.
A process where a third party negotiates with creditors and establishes a payment plan on behalf of the debtor. The fact that a person is in credit counseling may be reported to the credit bureaus and listed on the credit report. Credit Counseling; however, is more preferred by creditors than debt settlement, and it can help improve or lessen the damage to your credit score.
You may have heard that debt counseling will trash your credit report or that it's worse than bankruptcy; however, this is not true.
Debt counseling may have some effect on your credit, or it may have none at all. Some lenders may not want to do business with you after you've completed your plan, but others will.
Contrast that with a bankruptcy, which is viewed by almost all mainstream lenders as a huge negative on your credit report. These lenders, who prefer to deal with consumers with good credit, typically won't do business with you for the 10 years the bankruptcy remains on your file.
What happens to your credit during debt counseling largely depends on how your lenders report your account to the credit bureaus.
Being reported as late or delinquent will certainly hurt your credit score. A simple notation that you are in debt counseling probably won't. The credit score formula used by most lenders, known as FICO, now ignores any reference to debt counseling that may be in your file, according to a spokesman for FICO creator Fair Isaac & Co.
Even some lenders that were traditionally suspicious of debt counseling have loosened their stance. More mortgage lenders are willing to lend to people who have successfully completed repayment plans.
Some lenders say they even view debt counseling as an encouraging sign that a customer is getting his or her debts under control. Citibank, the largest issuer of credit cards, says people who have fallen behind on their payments often improve their status in the company's eyes by enrolling in -- and sticking with -- a debt repayment plan.
However, there are still some lenders who refuse to deal with anyone who has enrolled in debt counseling. And if you fell behind on your payments before you entered debt counseling, you'll find those late payments will still affect your credit score even after you've paid off your debts.
What is debt settlement: (also called debt negotiation):
The principal balance of your debt is negotiated to reduce the balance owed and get you out of debt faster.
Debt Settlement, or debt negotiation, is the act of contacting your creditors and negotiating a reduced payoff of your debt. It is not uncommon to pay 50% or less of the principal on your debt as settlement in full. This will save you more money in interest and principal payments than any debt relief program outside of bankruptcy. You should keep in mind, however, that some creditors will likely report your settlement to the major credit bureaus. However, when trying to get out of debt and to protect your credit as much as possible, debt settlement can be the most economical option for you.
As you can see, there are no easy answers for people who get in trouble with credit. It comes down to a personal decision; how badly do you need help, how badly has your credit already been affected, and how much worse would your credit rating become if you did not enroll in debt counseling.
Debt
Having
debt issues and discussing financial problems with a partner can be difficult.
Many times there is one person who takes care of the family budget and takes
responsibility for paying the bills. There can be conflicts when it comes to
talking about how or where to spend the money. It can be frustrating when one person likes to
spend money and the other wants to save more money. When
debt problems arise there can
be more stress that could cause bigger problems in a relationship.
Having
a savings account to fall back on during a financial crisis has helped many
people. Yet, a lot of people do not have a savings account, or they may not have
much money saved if thousands of dollars may be needed during times of financial
troubles. Things like unemployment or medical problems have caused many
Americans debt problems that were not expected. Discussing money and finding
options can sometimes lead to nowhere and may require an outside credit
counselor who can give some choices for solving the problems.
Being
honest might help, so a plan can be made as quickly as possible. As hard as it
may be to discuss debts, they will not disappear when ignored. The first thing
is to make a list of all the debts and exactly how much is owed on each one, and
then get a total amount. This lets you know a figure that you must work with. If
for example, there is $200,000 in debt, and it would be impossible to pay it
off, an option may be to file bankruptcy or try debt
settlement. However, if only $3,000 is owed on debts, devising a budget and
working with creditors who will adjust the monthly payments for a while, may be
a good choice instead of rushing into another debt relief option.
Financial
mistakes happen every day and it is best to learn from them and go forward.
Solving debt problems can take some time and requires work from all partners. It
may require being very frugal and living on a tight budget so all bills get paid
on time or paid off. Learn how to save money from each paycheck, even if it is
only five dollars. Track
spending habits and get on a budget, there is free personal
finance software available to be able to click in some numbers and see some
figures. Not knowing how much money is wasted from every paycheck will not help
pay down debts. Use every penny wisely.
Review Disclaimer:
Review information was gleaned from the website, and is neither an endorsement by us nor an confirmation of content nor a warranty of any promises made by the website. Use the review information at your sole discretion and sole liability.
National Foundation for Credit Counseling: As the nation's largest financial counseling organization, the NFCC Member Agency Network includes over 800 community-based offices located in all 50 states and Puerto Rico. In 2010, 3.2 million consumers received financial counseling and education from NFCC Member Agencies in person, over the phone, or online. To locate an NFCC Member Agency in your area call 800-388-2227. Para ayuda en Español Ilama al 800-682-9832.
Founded in 1951, the National Foundation for Credit Counseling (NFCC), Inc., promotes the national agenda for financially responsible behavior, and builds capacity for its Members to deliver the highest-quality financial education and counseling services. The NFCC is the nation's largest and longest-serving national nonprofit credit counseling network, with nearly 100 Member Agencies and more than 800 offices in communities throughout the United States and Puerto Rico. In 2010, NFCC Members assisted 3.2 million consumers, helping many to drive down their debt and take control of their finances.
NFCC Members, often known as Consumer Credit Counseling Service (CCCS) or other names, can be identified by the NFCC member seal. This seal signifies high standards for agency accreditation, counselor certification, and policies that ensure free or low-cost confidential services. NFCC Member Agencies can be reached in person in communities nationwide, on the phone toll-free at (800) 388-2227, or online. The NFCC national office is located in Washington, DC.
Certified Consumer Credit Counselors - When you are in a financial crisis, be sure to choose a certified credit counselor with a professional background in money and credit management and the wise use of credit. To promote high standards, NFCC members require that all counselors pass a comprehensive counselor certification program administered by a third party.
It isn't always easy to talk about debts and finances. But keep in mind our Certified Consumer Credit Counselors are professionals who are here to help. They will work with you to tailor a confidential program with solutions that work best for you whether you select face-to-face, over the phone, or via Internet counseling.
Online Counseling - In order to meet the growing needs of our customers, you can also submit your financial information online for help from a Certified Consumer Credit Counselor.
All online conversations with our Member Agencies are confidential and secure through encrypted servers, meaning that communicating online to our Certified Consumer Credit Counselors is just as productive and comforting as talking to them face-to-face.
Members of the National Foundation for Credit Counseling are uniquely qualified nonprofit organizations dedicated to providing free and affordable services to consumers who need a financial lifeline to pull them out of debt. Some of our members offer free budget counseling and Debt Management Plan services, and all members who charge fees or request contributions offer these services at affordable costs to consumers.
The National Foundation for Credit Counseling (NFCC) is the most respected name in the credit counseling sector for one simple reason: for more than 50 years, our members have offered accurate information, honest advice, and fair repayment plans, all at little or no cost to the consumer.
Review Disclaimer:
Review information was gleaned from the website, and is neither an endorsement by us nor an confirmation of content nor a warranty of any promises made by the website. Use the review information at your sole discretion and sole liability.
In general, most debts incurred by minors are not enforceable. Because minors may not be legally obligated to pay a debt, a debt collector may be prohibited under the FDCPA from discussing a debt directly with the minor. Under the FDCPA, the parents of the minor are considered the consumer, at least for purposes of communication. Thus, a debt collector could discuss a minor's debt with her parents.
However, while contracts with minors are unenforceable in most instances, there are circumstances where a contract made by a minor may be enforceable against parents who were not parties to the contract, and in some instances, against the minor herself. When a minor contracts for necessities such as medical care, food, shelter or clothing, the parents of the minor may be responsible even in the event they did not cosign for the services. This is due to the common law doctrine of necessaries. This principal places a duty on parents to provide support for their minor child's necessary expenses. State law will determine whether or not the doctrine of necessaries applies.
Get more information about debt, and read our articles related to debt counseling.
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Ways to control spending: *Stop Borrowing - consider 'owing money' as financial slavery to the lender, even if the lender is a friend or family member. Even this seemingly innocent person-to-peson loan can increase your spending habit and reliance on others. *Control Impulse Spending - impulsive buying habits could be aiding and escalating a debt addiction. *Don't Spend Simply to Spoil Yourself - using money as a pick-me-up when you're feeling poorly can encamp you deeper into the poor house. *Don't Rely on Cashback Credit Cards as Part of Your Income - the thought of making money while spending money can be enticing... and addicting. *Don't Partake in Competitive Purchases - just because your best friend just bought; and is bragging about, a brand new car, shouldn't lure you into buying one also.
