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1 Credit Counseling
Whatever debt elimination option you choose, you may wish to consider consulting with a professional credit counselor. There’s no particular amount of debt that means you need a “debt doctor” because it varies by income and situation. A better guide is to consider your symptoms. You may need a credit counselor if you are:
• Unable to make more than the minimum payment on your credit cards.
• Have to use credit for items you used to pay cash for like food and gas.
• Make credit card payments by charging them to other cards.
• So financially tight an emergency, like car repairs, could put you under.
• Never see improvement in your finances year after year.
• Constantly worry about money.
If any of these symptoms describe you, a reputable credit counselor could be just what the doctor ordered.
Finding a good Credit Counselor
When shopping for a credit counseling agency, remember even if the company claims to be a non-profit, it may not have your best interest at heart. You may wish to check them out with the Better Business Bureau and State Attorney’s General’s Office of Consumer Protection Services.
If you don’t choose wisely, it could have a very negative impact on your financial future.
Be cautious if a company urges you to join a debt management plan without considering your individual issues. Shop around and ask for all their prices and fees up front and in writing. A reliable credit counselor can tailor a program to fit your situation and offer you advice on several debt elimination solutions including debt management plans, debt rollup, and power payments, etc.
Debt management agencies typically require you write them a monthly check which is used to pay your creditors. They should manage your payments to pay off your debt as soon as possible—typically taking three or four years. A comment that you’re paying an account through a credit counseling agency may appear on your credit report until the account is paid in full, but will not hurt your credit score.
Questions to Ask Your Credit Counselor...
1. How do you determine the amount of my payment?
2. How will I know my creditors have received payments?
3. How often can I get status reports on my accounts?
4. Can you get my creditors to lower or eliminate interest, finance charges, or late fees?
5. Is a debt-repayment plan my only option?
6. What if I can’t maintain the agreed-upon plan?
7. What debts are excluded from the debt management plan?
8. Who will help me with my questions or problems with my accounts or creditors?
Options for Eliminating Your Debt
“A procedure is only as good as the people administering it...”
~ Robert E. Hunter
“It’s my wallet doc... how bad is it?!”
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