Debt Negotiation: If you’re not disciplined
enough to create a workable money plan and stick to it, can’t
work out a repayment plan with your debtors, or can’t keep
track of mounting bills, consider contacting a Debt & Bill
Counseling organization. Many Debt Negotiation 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 &
Bill Counseling organizations charge high fees, which may be
hidden, or urge consumers to make “voluntary” contributions
that can cause more bills.
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 money owing, 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
budget. 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 Help Plan: If your financial
problems stem from too much debts or your inability to repay
your money owing, a Credit Counseling agency may recommend
that you enroll in a Debt Consolidation Plan (DMP). A DMP
alone is not Debt Help, and DMPs are not for everyone. You
should sign up for one of these plans only after a certified
Debt and Credit Counseling 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 Debt Help 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 Help organization, which uses your deposits to
pay your unsecured debts., like your credit card bills,
student loans, and medical bills, according to a payment
schedule the counselor develops with you and your creditors.
Your creditors 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 and Credit Counseling
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 & Bill Counseling 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 and Credit Counseling 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 Counseling
Plan without spending time reviewing your financial situation.
offer to enroll you in a Debt Counseling
Plan without teaching you financial budget and money
management skills.
demand that you make payments into a
Debt Relief Plan before your creditors have accepted you into
the program
