Debt Consolidation

The unstable economy across the nation during the past couple of years especially this year 2008, has brought with it an increase in the number of advertisements promoting debt consolidation services organizations. If you are knee deep in debt and unable to pay your bills, credit counseling can be a financial life saver. But if you don’t do your homework you could find yourself even worse off than before.
A credit counseling agency may arrange a debt repayment plan, a creditor-approved arrangement that allows you to repay your unsecured debts at reduced interest rates. In these plans, you deposit money each month with the counseling Agency you deposits are used to pay your creditors according to a payment schedule the counselor develops with you. Some credit counseling agencies charge little or nothing for managing the plan; others charge a significant fee over time. Ask up front what the cost will be.
As part of the repayment plan , you may have to agree not to apply for, or use any additional credit while you are participating in the program. A successful plan requires you to make regular, timely payments, and could take 48 months or longer to complete.
A debt repayment plan does not erase your credit history. Under the Fair Credit Reporting Act, accurate information about your account stay on your credit report for up to seven years. In fact creditors may report an account in financial counselling as payments missed, or that there are write-offs. But, demonstrated pattern of timely payments should help you qualify for credit in the future.
If you want to work with a credit counseling agency, Interview Check them out with your Better Business Bureau that is close to you can also look them up on line at www.betterbusiness.com and also check with the attorney general in your state. Any reputable credit counseling agency should and you a free information kit about them self and it services it provides with out requiring you to provide any details about your situation. If not, consider a red flag and go somewhere else for you help.

BEFORE YOU SELECT A CREDIT COUNSELING AGENCY ASK FOR INFORMATION ON THE FOLLOWING:

Are the services confidential? Are budget and credit education opportunities offered??
Will they devise a plan tailored to fit your needs? Will your funds be protect? And How?
Are the counselors certified? Is the agency accredited?

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