| CREDIT COUNSELING
Where to Get Credit Counseling
You can get credit counseling from several sources. These include
credit unions, lawyers, and
university-sponsored programs. The personnel offices of some firms
also offer the service, as do those of some of the armed forces. Nonprofit
and for-profit specialized financial counseling
services are also available. The major problem is not so much finding
a source of credit
counseling services, but in being willing to admit that there is a
problem and share the problem
with a stranger. |
Q. Are all financial counseling services the
same?
A. No, there are nonprofit and for-profit financial counseling
centers. The National Foundation
for Consumer Credit provides leadership for about 1,470 nonprofit Consumer
Credit Counseling Services (CCCS) throughout the United States. CCCS offices
get most of their fees from credit grantors, but will typically charge
consumers a small fee for setting up a budget plan. Hence, the costs to
you may be lower than those of for-profit centers, which must cover all
their costs from charges to consumers who use the centers' services. However,
it is possible that, because of the source of their funding, nonprofit
centers may favor arrangements that benefit creditors the most.
While many for-profit financial counseling centers provide worthwhile
services, some may
exaggerate the benefits that they promise.
Q. What kinds of services can I get from a credit counseling
center?
A. Most specialized counseling offices provide two types of services.
First, they can help you set up a realistic budget so that you can manage
your debts better. Second, if you still have trouble paying your debts
on time, the center will contact your creditors and arrange a repayment
plan based on your budget. You will make a single payment each month to
the office, which will then distribute the payment among your creditors
until it pays all your debts in full. Most creditors prefer this type
of plan (since they eventually will get most of their money) rather than
"straight" bankruptcy. While many credit grantors agree to such
arrangements with CCCS offices, some will not work with for-profit counseling
offices.
Under a repayment plan through a CCCS, you may still have to pay finance
charges on
your debts. However, many creditors will waive (not require payment of)
finance charges and
delinquency fees after you have agreed to repay your debts through a CCCS.
Q. How can I find a CCCS or a for-profit counseling center?
A. Check the yellow pages of your phone book for "Credit
& Debt Counseling Services" or call toll-free 1-800-388-2227.
Contact CCCS on the web at www.nfcc.org or write and send a selfaddressed,
stamped envelope to:
National Foundation fo r Credit Counseling
8611 Second Avenue, Suite 100
Silver Springs, MD 20910
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