Consumer Debt Counseling – Some Valuable Tips

There are many agencies claiming to offer consumer debt counseling services across the United States. They say they can solve your debt problems either by consolidating your loans, providing you a money management solution or by boosting your credit ratings. But it is not wise to believe them straightaway. So, before you choose an agency for consumer debt counseling, you must ask the following four questions and satisfy yourselves with the reply.

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What types of consumer debt counseling the agency offers?

The consumer debt counseling services should help you solve your problems. You may be facing difficulties in paying multiple monthly payments, or you may be paying higher interest rates on your present loans or you may have a unique debt problem and you need an effective solution, you must ask the debt counseling agency about that whether they can help you in that regard or not.

In general, a consumer debt counseling agency will assess your debt situation and proceed to the next step that may be preparing a feasible payment plan. After that, the consumer debt counseling agency will help you negotiate with the creditors for lower interest rates or a new payment plan. The debt counselor may also help you in improving your credit ratings.

What the fees will be?

There are two types of consumer debt counseling services that are available – non-profit and paid debt counseling. In case of non-profit organizations, you will not have to pay for the services while for others you will be charged for the services. If you are selecting the services of a paid debt counseling agency, compare the fees of some counselors to get the best rate. Some non-profit debt counseling agencies may also have some hidden charges, ask them about that.

Is the consumer debt counseling agency approved by the government?

All consumer debt counseling agencies may claim that they are approved and certified by the government. But do not go by their words. You must check by yourselves on the Department of Justice’s US Trustee Program website — https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111 or you can check the list at the district bankruptcy clerk’s office.

There are also certain associations of consumer debt counseling agencies, for example Association of Independent Consumer Credit Counseling Agencies, American Association of Debt Management Organizations and the National Foundation for Credit Counseling. Also, know what qualifications and expertise do your counselors have.

What does the consumer debt counseling agency do to keep information confidential and secure?

When you take the services of a consumer debt counseling agency, you will have to provide all details i.e. your personal information including your phone number, date of birth and credits with the name of the lenders. And you must ensure that the consumer debt counseling agency keep your information confidential and secure. Some frauds may misuse your information.

While availing the consumer debt counseling, you should also ensure the following to protect yourself from frauds and deceptive organizations.

1. You should not provide personal financial information such as credit card account numbers and balances without knowing the authenticity of the debt counseling agency or before you sign the contract for debt management services.

2. A genuine consumer debt counseling agency will not enroll you in a debt settlement program without assessing your financial situation.

3. Ensure that the debt counseling agency teaches you budgeting and debt management skills before enrolling you in a credit management.

4. Must not make payments into a credit management program before your lenders have accepted you into the plan.

5. In case you face any fraud, you can file a complaint to the Federal Trade Commission, which prevents deception and illegal activities in credit counseling. To file a complaint, you can visit http://www.ftc.gov.

Ensure that at the end of consumer debt counseling program, you must see yourself in an improved situation. The creditors should not follow you again to your home, you should be paying a lower amount monthly, and you should see your debts ending after a certain period and get peace of mind at last.

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