Break the Debt Cycle – For Good! 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.
Benefits of Using a Credit or Budget Counselor. 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!
Questions To Ask Any Credit or Budget Counselor. 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.
Choosing the Best Credit or Budget Counselor For Your Needs.
There are four different organizations that I recommend:
1. MyVesta.com (800/680-3328). MyVesta.com is funded primarily
by donations from consumers and is very upfront about their
fees. They ask for an initial tax-deductible donation of $50
(which you pay only after you agree on a monthly payment
amount), and charge $2.90 per creditor each month. When the
counselors review your debts they’ll tell you if you have
creditors that won’t negotiate with MyVesta.com. MyVesta.com
pays creditors weekly, and your monthly payment to MyVesta.com
is due the 15th of each month. MyVesta.com also has a secure
website where you can view your account statements whenever you
like. The only drawback: MyVesta.com doesn’t currently offer
electronic fund transfers.
2. Consumer Credit Counseling Service (CCCS; 800/388-2227). CCCS
has local offices across the country and the 800-number will
automatically connect you to the office nearest you. The quality
of service (and the cost) varies at each site, but you can
generally get good budgeting help at CCCS. If the counselor
tells you that bankruptcy is your only option, try the others
organ-izations listed here first before you take that step. If
you’d like an on-going relationship with your counselor, where
you can sit down face-to-face every few weeks, this is the group
for you.
3. Profina (formerly known as Genus; 888/844-6227). Profina
charges $2 per creditor each month. With Profina your payment
can be directly deducted from your checking account on any day
of the month. Your creditors are paid monthly but Profina tries
to match up your payment date with your due dates so your bills
get paid on time. Profina offers immediate assistance by phone,
rather than local appointments. This is handy if you’re in a
time crunch and need to set up a repayment plan immediately or
if you’d prefer to remain anonymous. If in-person contact with
your counselor is important to you, you may prefer CCCS.
4. Lawyers United For Debt Relief (LUDR, 800/992-3275, Dept.
556). LUDR is the place to go if you can’t even pay your
creditors the minimum payments due -- or if you’re behind a
month on your car or mortgage. While your fee each month is more
expensive (a flat $100 a month), what you get is an actual
debtors’ rights attorney working on your behalf to negotiate
with your creditors and get them to stop foreclosure,
repossession or garnishments -- and get them to accept less than
the minimum payment. LUDR also offers no-interest loans to help
you bring your car and mortgage payments up-to-date.
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There’s no obligation or payment due to any of these groups
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 four options and then pick the one
you’re most comfortable with!
About the author:
Contemporary Prosperity Advisor Paula Langguth Ryan is dedicated
to helping you heal your relationship with money by helping you
change the way you think and feel about prosperity and
abundance. To learn more about her innovative prosperity
teachings, visit her website at www.artofabundance.com.
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