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Credit Counseling Can Save You From Bankruptcy
By: James Mahony
If you find yourself facing more debt than you can manage on your own, you might
want to consider getting the assistance of a credit counseling agency. Because
these agencies handle some of your most sensitive personal information, you'll
want to be sure that you're dealing with an efficient and reputable organization
before you get started with them. After locating several credit counseling
agencies through the Yellow Pages or via the Internet, you can assess their
reputation by checking with your local Better Business Bureau. Some credit
counseling agencies are strictly non-profit and offer their services for free to
those they deem in need of assistance. Others charge certain fees, ranging from
an up-front deposit to a final bill that is based on the time that was spent
consolidating your debts.
You'll want to find out right away if you will eventually be charged for the
services that they provide because if you are in debt, the last thing you need
at this point is another bill. Once you've determined if you'll be able to work
with the agency, you can start repairing your credit rating by letting the
agency consolidate your debt.
Think about what you've read so far. Does it reinforce what you already know
about bankruptcy? Or was there something completely new? What about the
remaining paragraphs?
Credit counseling agencies can help you draft a debt repayment plan, outlining
what needs to be done in order to clear all of your outstanding balances. They
calculate your income, along with any unforeseen financial setbacks (such as
medical expenses) are also taken into account when making up this plan.
Whatever is left of your debts are then converted into one lump sum, which you
can then start to repay in monthly installments. In some cases, an agency might
buy the debt from your creditors, meaning you make your monthly payments
directly to the agency. In other cases, the agency might intervene on your
behalf, and convince your creditors to extend grace periods, temporarily suspend
collection, or accept a reduced lump sum.
Credit counselors can help you get out of debt, but they cannot totally erase
any past damage to your credit report. Although past bad credit can remain on
your report for several years, working with a credit counseling agency can still
help you get approved for credit at some point in the future as it shows that
you put in a lot of effort. Through a credit counseling agency, you will be able
to make consistent payments against your outstanding balance, which does reflect
positively on your credit report, and can be influential if you apply for credit
in the future.
Take time to consider the points presented above. What you learn may help you
overcome your hesitation to take action.
About the Author:
James Mahony is the founder of Free Credit Repair Guide - A site dedicated to Credit Repair Free Credit Repair Guide Credit Card Approvals Articles for Website Content
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