OPTIONS LEARNING CENTER

> You only have a few options:
  1. Credit Counseling – best for your credit, can you afford it?
  2. Get a loan – Behind or over-extended, can't do it.
  3. Bankruptcy – Rather have a 13 or Settlement?
  4. Pay creditors directly – If your pay forever plan was working, you wouldn't be looking for help.
  5. Debt Settlement Group

Credit Counseling

  • The best thing for you to do to keep good credit is to pay your bills on time, in full, and on your own. If you need a little assistance, without seriously damaging your credit, Credit Counseling is the way to go.
  • However if you cannot afford Credit Counseling payments, it will not work for you. Call or apply for a payment quote. If you have certain debts (such as certain collections, legal accounts, charge offs, medical bills, etc.) Credit Counseling does not offer any benefits (such as reduced interest, stop late and over limit fees, etc.) and therefore will not work for you.
  • If Credit Counseling is not right for you, you would need to look at Debt Settlement.

Credit counseling is a process offering education to consumers about how to avoid creating debts that cannot be repaid. It often involves negotiating with creditors to establish a debt management plan for the individual. A debt management plan may help the debtor repay his or her debt by working out a repayment plan with the creditor. Debt management plans, set up by credit counselors, usually offer reduced payments, fees and interest rates to the client.

Under a reputable Consumer Credit Counseling (CCC) program, your creditors may be willing to reduce your interest rates and waive over-limit or late fees. You will make one payment each month to the counseling firm, and they in turn distribute the funds to the creditors. In addition to making the monthly payment against your debt, credit counseling companies generally require upfront fees and regular monthly fees.

CCC companies work for the creditor. They are paid a commission of up to 15% of what they recover from you. CCC companies do not reduce the total debt you owe, but simply allow you to combine your total monthly payments in to one payment, which is often higher than your regular monthly minimums. CCC companies project a 4-6 year period for repayment of debts, but often this ends up being longer because individuals are unable to sustain the higher monthly payments and are dropped from the program, making it necessary to start over again with only a slightly lower balance. Approximately 65 - 70% of the people who enter a CCC program are unsuccessful and fall off before the program is complete.

CCC programs also affect your credit report. When you are accepted into a CCC program your creditors will close your accounts and report this to the credit bureaus. Additionally, nearly all creditors will report to the credit bureaus that you have entered into a "hardship" program and need help. Although this is far less damaging than bankruptcy, it definitely does impact your credit rating. You may also fall delinquent for a short period at enrollment, which will have a negative effect on your credit score, and if you decide to leave a CCC program before you have finished the program, your failure to complete the process can be listed as a negative listing on your credit report. Just the simple fact that you resorted to a debt counseling program will be a red flag for prospective credit grantors.

A CCC program may be effective for people who want get out of debt and can afford to make slightly higher monthly payments relatively comfortably for the next 3 to 5 years. If you can continue to pay the higher monthly payments and do not foresee future financial problems, this is an okay way to go. If you are currently struggling to make minimum monthly payments, it is unlikely you will succeed using this method.

Contact DebtRX today to find out which debt management option is right for you! Call now for a free, no obligation analysis 1-866-601-7857