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?