Tag Archive | "debt relief counseling"

5 Important Questions To Ask Your Debt Relief Counseling Company

There are hundreds of credit counseling companies out there all clamoring for your business. The crumbling economy has got everyone in some state of financial trouble. But, how do you know which company you should go with if you’ve decided that credit counseling is the way to go? Obviously you don’t want Joe Schmoe down the street that operates out of a shoe box, but there are many companies that look virtually identical. What questions should you ask to make sure that this a great fit for both parties involved? Read on for some of the key things you need to ask before signing on the dotted line.

Question number 1. What’s Your Plan To Eliminate My Debt? There are two main types of debt relief amongst these types of companies. Firstly, there is debt repayment which involves contacting creditors and negotiating a much lower interest and monthly payment on a fixed monthly plan. The second type is debt negotiation. Like it’s name implies, this involves negotiating a settlement amount with the credit card companies for a lower amount that is pennies on the dollar and less than the total amount due. Both are effective strategies for eliminating debt.

Question 2. Do you have written policies and procedures in place within your company? Written in black and white, a strict code of ethics, rules, policies and procedures is the difference between our Joe Schmoe and a professional, knows-what-it’s-doing company. There is absolutely no question on how things are done with a written policy in place. Ask to see these documents and read them through to make sure you understand how things work.

Onto Question number 3. How do I know what’s going with my account once you start work on my case? One of the most important factors when working with debt relief counselors is the follow up. Ask them how you will check to see what’s going on from month to month. One of the most popular methods is to log onto a secure account portal to see where payments and balances are each month. Other companies may provide paper statements in the mail for their clients.

Question 4. How much does it cost to work with you? Everything may seem fine and dandy with policies and procedures, but if the fees they want to charge you seem outrageous then it may be time to walk away. Keep in mind your current balances and what they will do for you in the debt repayment and negotiation process. If your gut tells you it’s too high, then it probably is. Walk away and find another company.

Last question. Are your results guaranteed? Credit is a tricky business, it is constantly changing and flexing with the economy. A truly honest and integrity based debt relief counseling company will tell you that no results are absolutely guaranteed. It just can’t happen. What they should be able to guarantee is their procedures and work done. A company that tells you that they absolutely guarantee their results is taking you for a walk in the magic woods. Put down that pen, politely decline and go to another company for your debt relief needs.

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The Benefits of Debt Relief Counseling

We’ve all heard of debt relief counseling. We probably all know how it works and why we need it. In fact many of us consider this to be a solution to our financial woes, and in all honesty it really is. But, debt relief counseling can mean a whole lot more than just getting rid of debt. It can instill in us new habits that can actually help us avoid falling into the same old money trap in the future. How awesome is that! Let’s delve deeper into some of the benefits going through debt relief counseling can give us.

Have you ever had that moment where something has just dawned on you? An Eureka! Moment or seeing someone you’ve known for years with brand new eyes? This perfectly describes the moment of realization for many people who looking at their mountain of bills declare “I need help!” And not a moment too soon. The debt relief counseling company can be your ally in the crusade against debt. They are much more than a negotiator, they are an educator. Expect to see lots of classes and literature when you firs sign up with your debt relief company. Consider this to be the roadway to learning how to get your spending and saving habits in check.

Credit counseling companies offer a wide range of services from literal counseling to paid services to help you get rid of your debt faster. With a credit counseling service, your debt will be repaid in monthly installments to your lenders. The credit counseling company will go in as a third party entity on your behalf and negotiate the interest rate and monthly payment down to an acceptable rate. Expect to pay the credit counseling service a fee on top of your monthly payments. The other type of service available is the debt negotiation company. They work differently than a simple repayment program. The debt negotiator will contact your creditors directly to settle with them for a portion of what you owe. Typically, this is pennies on the dollar and the account is closed once all debt is settled. Make sure you do your due diligence when it comes to paying the firm a fee for negotiating on your behalf.

These are the two main services that a debt relief company will offer, but in fact there are more benefits to working with them than just the repayment of loans involved. Expect the company to give you literature on how to manage your money effectively from day to day. Learn how to spend and save effectively, so that you don’t fall into the same credit trap again. You will learn how to save for emergencies and how to be financially prepared for any crisis that falls in your lap. Debt relief companies want to help you on the road to financial freedom, and although debt repayment services are the mainstay of these companies, the education you receive on money management is the true benefit to working with them.

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