Desperate times often call for desperate measures. When you are in debt and considering bankruptcy, you might consider any solution to get you out of trouble. However, many debt settlement companies promise more than they can deliver—and charge you for it. Working with a debt settlement company will also negatively affect your credit rating for a long time to come. A less radical solution could be working with a free credit counselor to develop a plan to manage your debt.
How Does Credit Counseling Work?
Credit counseling agencies are non-profit community services designed to offer free help to people in debt. When you call an agency, you will talk to a certified, trained counselor who will go over your finances with you in a confidential, non-judgmental consultation. Working together, you will develop a realistic plan for paying down your debt and building a savings account—all based on your specific financial situation, not a cookie-cutter approach. The counselor will offer tips and support to help you take control of your financial situation.
You may also have the option of enrolling in a debt management plan for a fee. Under one of these plans, your unsecured debts (such as credit cards) are consolidated into one manageable monthly payment. It will be up to you to continue to make payments and to reach out for help if you run into trouble. You must also make a commitment to not seek new credit cards and to avoid taking on additional debt. If you are committed to the process, you may be able to get rid of your unsecured debt in as little as three to five years. While you will pay an enrollment fee and monthly administration fee, since you are working with a non-profit agency, the costs will be considerably less than a debt settlement company. To locate a credit counselor near you, visit the National Foundation for Credit Counseling (NFCC) website.
If You Need Legal Advice, Call Us
While credit counselors can help with advice and budget tips, they cannot offer legal advice. If you are being sued by a creditor or have concerns about a debt settlement company, contact the attorneys at The Consumer Law Group, P.C. Fill out the request on this page and we will get back to you soon.