Debt Consolidation

Debt And Credit Counseling – Frequently Asked Questions

If you are looking for debt and credit counseling services, you are not the only one. As per the recent reports issued by Federal Reserve, there is a debt of $18000 per American household. The aggregate total outstanding balance of debt on Americans is currently a whopping $1.98 trillion. The financial life of average Americans runs on credit and debt, and this is not a hidden fact. Financial counseling companies thus have a big market to run their business in. No prize for guessing that there must be many unscrupulous companies also; there definitely are. You have to be very careful with which company you sign up with. Following are some frequently asked questions regarding this. The answers to these questions will definitely help you make informed decisions and to move towards a more stable financial future.

Do You Really Need A Debt Counselor?

It is up to you to decide whether you need a debt counselor or not. If you can review your financial situation thoroughly and have a fair idea about how much you earn every month and how much you have to pay toward your debts, you may find out a solution on your own. If you are confused and do not know who to go about it, you need help from a debt and credit counseling company. Many people think it in terms of the total amount of debt. Their question usually is how much debts they should have to consider hiring a financial counselor. The answer is there is no limitation. For a person, even $50000 of debt might be easily manageable; for others, just $5000 of debts might sound overwhelming. However, it is important for you to keep in mind that many companies these days require you to have a specific minimum amount of debt in order to qualify for a counseling program. The eligibility criteria may vary from one company to another. Therefore, you are recommended to check those criteria thoroughly before you sign up with one.

How To Find The Best Counselor?

Always remember, not all counselors make the right choice for you. As said earlier, there are a few unscrupulous companies in the market. So, be very careful in your approach. When it comes to choosing the best debt and credit counseling company, the first thing you have to do is to check their past records with the Better Business Bureau. Pay special attention to the fact if there have been complaints against that company.

Do Nonprofit Agencies Offer Free Services?

There are many counseling agencies that claim to be nonprofit organizations. Many people get confused with the term “nonprofit”; they assume that nonprofit agencies offer free services, which is not always true. The term only specifies that the company work on a no-profit-no-loss basis. They still need money to run their business. Therefore, you must inquire about the terms regarding fees right in the very beginning in order to avoid unpleasant experience at a later stage. Never assume anything on your own or never believe in verbal assurances; always get everything in writing. It is also very important to note that just because a company claims to be a nonprofit organization, it does not mean that offer best services. You must still do a thorough background check to find out information about the quality of their services, their experience, and specialization. What is worse, many unscrupulous companies work under the “nonprofit” tag but charge an unfairly very high fee. So, you must always do your research thoroughly.

Does Getting A Financial Counseling Services Affects Your Credit Negatively?

Debt and credit counseling services are different from debt management programs. Though some debt management programs may have adverse effects on your credit report, there are no such risks involved when you get a financial counseling services. In fact, it can only help you impro0ve your credit worthiness. Still, if you are getting a financial counseling service, it may make it a little difficult for you to qualify for new credit.

How Long Does It Take To Pay Off All Debts Using A Counseling Service?

The exact answer depends on the severity of the debt problems you are in, your monthly income, and how efficient the counselor you have signed up with is. In general, it can be said that your debt burden is eventually reduced and you can start paying off your debts much faster than ever before when you use Debt and credit counseling services. You will have to work hand in hand with the credit counselor appointed for your case to find out an accurate idea on how long it will take to eliminate all your debt problems.


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