Selecting a Respectable Credit Counseling Organization | CreditRepairExpert.org

While the pervasiveness of devious and dishonest debt assistance programs continue to increase at an alarmingly high rate, the availability of genuine credit counseling organization offers an incredible opportunity to get ahead of the clutter and make informed financial decisions. Credit counseling organizations offer an extensive assortment of specialized services which includes financial planning, effective budgeting, credit training and a variety of instructional resources for practice. The various services offered are very inclusive with special counseling in monetary matters that concerns real estate, particularly for new home buyers with sensitization on the intricacies of mortgage and on how to prevent foreclosure. The financial counseling service provides tremendous assistance in developing a practical debt management plan that systematically gets you out of debt.

In most cases, charitable debt counseling organizations utilize churches and united way as an avenue to reach target prospects. Debt counseling organizations inspire the trust of creditors and can harness resources to facilitate repayment of debt for debtors.Credit Counseling Organization

Identifying a credible charity credit counseling organization can be a daunting task as there are countless organizations with an irrevocably commitment to fostering organizational marketing objectives instead of providing relevant assistance to clients. These organizations are often charge outrageous acceptance fee which is followed up by exorbitant periodic contributions without providing beneficial credit instructions, and effective debt management packages. These devious organizations are mostly centered on unsecured debts which do not really impact on debts and could in most cases instigate the mismanagement of inadequate resources while misleading funds away from the most vital debts.

Unarguably, the most important consideration when it comes to debt management and building credit scores remains identifying a credible charitable organization. Sadly, this is often the most challenging task.

Consumer Credit Counseling Service and Agencies Approved by the U.S. Trustee

There are two practical options when it comes to identifying a debt management or credit counseling service that is credible and they usually involves the use of an affiliated company with the Consumer Credit Counseling Service (CCCS) or one of the agencies approved by the U.S. Trustee.

Consumer Credit Counseling Service (CCCS)

Consumer Credit Counseling Service (CCCS) is a credit and debit counseling company. CCCS is not a singular company as CCCS is just the fundamental operating name of numerous credit and debt counseling agencies that are connected with the National Foundation for Credit Counseling (NFCC)

CCCS’s service fee begins with nearly $25 which is followed by a monthly payment of about $50 while accepting fee of $20 when the creating a repayment plan. In addition to these, the CCCS also provides assistance with monthly budget for an insignificant payment or would do it for free in other cases. CCCS accommodates customers that cannot make payments as they could decide to assist for free. Also, a couple of the various CCCS offices provide specialized assistance in the areas of saving funds for the procurement of a house and can assist with analyzing your credit report.

In most cases, the various companies would prevent you from using credit cards when repayment plan is ongoing.

CCCS is quite extensive with offices strategically located in all of the states. If you require CCCS services you can contact the CCCS through the website www.nfcc.org. preferably, you could reach the CCCS at the head office via 800-388-2227 with phone, internet and face-to-face counseling available.

Credit Counseling Agencies Approved by the U.S. Trustee

Credit counseling is compulsory for virtually all bankruptcy case with a few exemptions. Counseling has become mandatory for a nonprofit organization for a specified number of times which is authorized by the Office of the U.S. Trustee. Unarguably, the U.S Trustee organization provides a list of credible organizations that can assist with a repayment plan while eliminating the hassle of falling prey to duplicitous organizations.

There is a detailed list of authorized organizations that you can find on the Trustee’s website, at www.usdoj.gov/ust.

 

Is there a possibility of credible credit counseling organizations being partial to creditors?

Are Even Legitimate Credit Counseling Agencies Biased Towards Creditors?

There are arguments opposing the use of credible nonprofit credit and debit counseling organizations. The proposition is based on the fact that most organizations are supported by creditors thus engendering the seemingly logical conclusion that these organizations are in no position to objectively counsel debtors file for bankruptcy particularly when the organization would not get financing from various financiers such a s United Way and other federal agencies.

In the bid to clarify the aforementioned allegation that stirred up customer fears, the credit and debt counseling agencies endorsed by the National Foundation for Credit Counseling came to a unanimous decision with the Federal Trade Commission to reveal all of these facts to customers:

  • That creditors money propels most of the company’s processes
  • That there has to be an equilibrium between debtors readiness and capacity to pay with the conditions of creditors that support the office,
  • An unequivocal and factual estimation of the period it would take to pay back debts using the debt management program.

Important inquiries that must be verified before selecting an agency… 

Investigate before opting for debt relief service

While the CCCS enhances your chances of getting a credible organization, the following factors should be carefully considered before opting for any debt relief agency

  • Ascertain if the agency is actually nonprofit: while this is largely deceptive, several organizations present themselves to be nonprofits while the reverse is the case in actuality. Fortunately, a good number of these companies have had their nonprofit status withdrawn by the IRS. Verifying this fact is imperative and could be ascertained by IRS website at w,vw.irs.gov/ charities, and click “Search for Charities.” Following this procedure would help you determine if the organization is a nonprofit or a deception.
  • Verify financial commitment: it is important that you make a conscious effort to verify the payment plan of these professed nonprofit organizations as there is always a hidden financial obligation to these organizations. Most times it could be in the form of donations or fees. The verification process has to be comprehensive and special attention has to be focused on the admittance fee and monthly payments that covers all monetary considerations for your account to be created with the agency. Getting a written record of the financial requirements for your account could be very useful. While the verification process is ongoing, it is also necessary to ensure that you do not make any major payment until you have sufficient information about the agreement plan that the company has brokered with the creditors. Additionally, you must create plenty of time to evaluate and determine how convenient and feasible the payment arrangement is.

In cases where the agency is a profit oriented agency, the FTC makes it mandatory for the company to reveal relevant information.

Be skeptic when the company does not carefully examine your debts, earnings and financial detail:  when you encounter a situation in which you are being persuaded with the specific purpose of making you agree to a debt management plan, then it is advisable that you refrain from taking it. Contrastingly, a credible debt management service company often takes plenty of time to scrutinize the various options available that best meets your need. In cases where you feel hurried into selecting a program, there is a high chance that they are not concerned with your welfare and are just out to get commissions from your payments. One of the best ways to get the identify a credible organization that is concerned about your interest is that they offer a comprehensive list of programs and are often enthusiastic about helping you understand the various arrangement.

The nature of accounting: it is imperative to understand that you would be remitting payments to the organization over a long period of time, therefore it is necessary to ensure that you have an explicit and detailed breakdown on how the amount of payment that would be made to each creditor as well as the number and sum of payment that would be needed to complete the plan. Getting regular statements and financial reports from the company would help you keep track of payment and monitor progress.

Evaluate customers’ feedback: customers’ feedback is one of the most important factors when assessing the credibility and efficacy of an organization’s service. Customers’ feedback gives a definite insight that helps estimate a company’s performance and to decide whether or not the organization is suitable for you. Find out the number of debts that are contained in the various plans and the rate of success in the debt management by measuring the duration of payment periods, ascertain if the customers had difficulties that constituted interruptions or if there were complications that culminated into litigation. Also, verify if the customers were buoyant to tackle various debt situations asides the debt contained in the plan. After you have carried out necessary inquiries, you should also corroborate findings with information from the local Better Business Bureau and the office of the state attorney general to determine if there are recorded cases of objections and criticisms against company. When there is an objection against a company, you can think of it as a red flag which should make you cautious of the company. While this is an axiomatic fact, be careful to investigate companies that do not have objections and criticisms as the absence of complaints does not exonerate the company from duplicitous practices. They may still in the process of earning criticisms and litigations.

Ensure confidentiality of details: Your financial details have to be kept secret as failure to do so could have dire ramifications.

Find out how workers are rewarded:  this information has to be in print form as there are countless cases of duplicitous companies that pay commission to workers. The logic to this is quite simple. If a company pays workers for getting potential customers to take available plan, then there is a high chance that the company is self-seeking and as such you must refrain from doing business with such a company.

Discover how they intend to use counseling to improve your credit report and score: this requires that you ascertain the impact of your involvement with debt management plan and counseling on both your credit score and report. In most cases, it is important to have answers in print.

Take measures to guide against bank bankruptcy and misappropriations:  ensure that you monitor the security of your funds and verify the integrity of the person that disburses the fund to you. Typically, there should be two distinct accounts that would articulate money disbursed to creditors and payment for company service. The most preferred approach is to use a trust account. In doing this, the company is restricted from misappropriating funds as money is largely used for paying of creditors.

In situations where the payments are made to a bank account, you must request for a written proof that individual customer’s funds are independently insured by FDIC. Ascertain which bank is used by the bank and if you have an option to select a different bank.

Additionally, there has to be a written document that provides insurance against employee misappropriation.

Ascertain whether refund is available if you decide to abandon program:  this should be the one of your topmost concerns and should be ascertained before you join a program. The arrangement of the program should be such that makes provision for you to get a refund at such pointy when you decide to abandon the program. Usually, money that is yet to be disbursed to creditors and left over money from services that has not been rendered should be made available to customers. The guarantee the smooth flow of this process, you must be able to verify for fact that the program does not disburse funds up front to creditor. Once the agreement is satisfactory, make sure that it is in print.

Inquire to know the number of collaborating companies and their specific duty:  most times companies operate collaboratively to eliminate laws that protect customers. In most cases, non-profits partner with profit organization which is an arrangement that can be very deceiving to unsuspecting customers while avoiding obligations through the nonprofit standing. It is wise to not be involved with these kinds of companies.

Compare expenses against savings: compare the expenses against savings before you agree to the program.  This would mean that you allow the company to present a comprehensive list that clearly shows payment for service as well as the disbursement structure to creditors. When the statement is given, it is imperative that you scrutinize repeatedly before agreeing to the program.  With all of the information you have gathered you have sufficient idea on how to bargain for a suitable arrangement for debt collection. Also you must find out if the counseling program is offers an economic advantage over the charge for service.

In addition to this, you would have to calculate the periodic payment plan against your budget for an extended period with the view of ensuring that you can balance debt payment, cost of living and other miscellaneous debts not contained in the program plan.

If you still need clarification, FTC offer guidelines that can help you make informed decisions. The FTC’s tips and warning signals when using Debt service companies in its publication, “Fiscal Fitness: Choosing a Credit Counselor.” You can get it online at www.ftc.gov/bcp.edu/pubs/consumer/credit/cre26.shtm.  

Monitor your plan

 Now that you have been able to make an informed selection of the debt management plan that is most suitable for you, the next phase involves monitoring the plan regularly to make sure that it functions according to predetermined objectives. Here are some of the considerations to effectively monitor your plan:

Examine the fee: evaluate the fee to make sure that it is in accordance to what is contained in the statement. More importantly, make certain that the fee stays the same with the initial agreement.

Supervise disbursement to creditors: you have to be very attentive and hands on with the supervision of your plan. This often includes verifying if and when disbursements have been made by the agency to your creditors. This would also require that you call your creditors regularly to ascertain this information from them directly. Delayed payment can be disadvantageous to you and supervision can help prevent it.

Follow up on discounts: this is necessary to keeping track on the reductions and to ensure that you benefit from these discounts. The most effective way to achieve this is to verify from creditors or by inspecting the statement.

 

 

Steven Millstein

Steven Millstein

Steven joined CreditRepairExpert.org in June 2016 as a Credit Repair Adviser to continue his mission of making a difference in the world. Everyday, Steven speaks with individuals and families in the online credit repair community to answers questions and offer help people on their journey to repair their credit rating. If you have a story idea for Steven or you would like help with credit repair, please email him at hello@creditrepairexpert.org.
Steven Millstein

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