Credit Counseling Can Save You From Bankruptcy
If you find yourself facing more debt than you can manage on
your own, you might want to consider getting the assistance of a
credit counseling agency. Because these agencies handle some of
your most sensitive personal information, you'll want to be sure
that you're dealing with an efficient and reputable organization
before you get started with them. After locating several credit
counseling agencies through the Yellow Pages or via the
Internet, you can assess their reputation by checking with your
local Better Business Bureau. Some credit counseling agencies
are strictly non-profit and offer their services for free to
those they deem in need of assistance. Others charge certain
fees, ranging from an up-front deposit to a final bill that is
based on the time that was spent consolidating your debts.
You'll want to find out right away if you will eventually be
charged for the services that they provide because if you are in
debt, the last thing you need at this point is another bill.
Once you've determined if you'll be able to work with the
agency, you can start repairing your credit rating by letting
the agency consolidate your debt.
Think about what you've read so far. Does it reinforce what you
already know about bankruptcy? Or was there something completely
new? What about the remaining paragraphs?
Credit counseling agencies can help you draft a debt repayment
plan, outlining what needs to be done in order to clear all of
your outstanding balances. They calculate your income, along
with any unforeseen financial setbacks (such as medical
expenses) are also taken into account when making up this plan.
Whatever is left of your debts are then converted into one lump
sum, which you can then start to repay in monthly installments.
In some cases, an agency might buy the debt from your creditors,
meaning you make your monthly payments directly to the agency.
In other cases, the agency might intervene on your behalf, and
convince your creditors to extend grace periods, temporarily
suspend collection, or accept a reduced lump sum.
Credit counselors can help you get out of debt, but they cannot
totally erase any past damage to your credit report. Although
past bad credit can remain on your report for several years,
working with a credit counseling agency can still help you get
approved for credit at some point in the future as it shows that
you put in a lot of effort. Through a credit counseling agency,
you will be able to make consistent payments against your
outstanding balance, which does reflect positively on your
credit report, and can be influential if you apply for credit in
the future.
Take time to consider the points presented above. What you learn
may help you overcome your hesitation to take action.