Debt Negotiation: If you’re not disciplined
enough to create a workable financial 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
Couseling organization. Many Debt Couseling 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 and Credit
Couseling 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
Help. Many universities, military bases, credit unions,
housing authorities, and branches of the U.S. Cooperative
Extension Service operate nonprofit Debt Counseling programs.
Your financial institution, local consumer protection agency,
and friends and family also may be good sources of information
and referrals.
Reputable Debt Negotiation 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 debt 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 Counseling Plan: If your financial
problems stem from too much debt or your inability to repay
your debt, a Debt & Bill Counseling agency may recommend that
you enroll in a Debt Consolidation Program (DMP). A DMP alone
is not Debt Negotiation, and DMPs are not for everyone. You
should sign up for one of these plans only after a certified
Debt Help 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
Credit Counseling 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 Counseling organization, which uses your
deposits to pay your unsecured debts., like your credit card
bills, student loans, and medical money owing, 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 Help 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.
Make sure your protected
Be wary of Debt and Credit Counseling
organizations that:
charge high up-front or monthly fees for
enrolling in Debt Help or a Debt Consolidation 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 Help Plan
without spending time reviewing your financial situation.
offer to enroll you in a Debt Relief
Plan without teaching you budget and money management skills.
demand that you make payments into a
Debt Management Plans before your creditors have accepted you
into the program
