Q.Are you a candidate for credit counseling?
A. If you feel overwhelmed by your debts, or would like someone to help you make payment arrangements with your creditors, you may want to use a credit counseling agency. These are organizations that specialize in helping you deal with your debt by working out a special payment plan with your creditors.
Some organizations offer a plan to reduce or eliminate your debt. Their plan can be a systematic way to pay down your outstanding debt through monthly deposits to the agency, which will then distribute these funds to your creditors. By participating in the program, you may benefit from reduced or waived finance charges and fewer calls from collection agencies. And when you have completed your payments, they may help you reestablish credit.
How can you tell if credit counseling may be an option for you? Take the debt test below and if you answer "yes" to most or all of the questions, you may be a candidate.
1. Do you have less than three months' of expenses in a cash reserve?
2. Are you using credit cards for items you used to buy with cash?
3. Are you afraid to know the total that you currently owe on your long-term debts?
4. Have you reached the limit on your credit cards?
5. Can you only afford to make the minimum payments on your debts?
6. Would losing your job jeopardize your ability to make payments right away?
If you decide to use a credit counseling agency, make sure you choose one with a good reputation. While all such organizations are required to maintain non-profit status, some maintain close ties with for-profit corporations with questionable tactics. Use the resources below to help you find a reputable agency in your area.
Some people avoid credit counseling because they are concerned that it will "ruin their credit rating." Don't let this deter you from seeking help! While it's true that some lenders may view a debt repayment plan as a negative, it certainly won't look worse than having multiple late payments on one or more credit cards.
©2010-2012 Financial Finesse, Inc. All rights reserved.
This document contains confidential and proprietary information of Financial Finesse, Inc. and is intended solely for use of
the intended recipient. Unauthorized reproduction or distribution is strictly prohibited. The information contained in this
document is not to be construed as advice. If you have questions about your financial situation, you should contact a
National Foundation for Credit Counseling
Association of Independent Consumer Credit Counseling Agencies
Federal Trade Commission - Choosing a Credit Counselor
Nonprofit Debt Counseling Organizations