Credit counseling

Credit counseling: A process where a debtor is advised on how to get rid of unwanted debt.

Credit counseling: A process that explores the prospect of repaying debts without resorting to bankruptcy. It also educates the debtor about credit, budgeting, and financial management. Under the 2005 bankruptcy law, a debtor must seek credit counseling with an approved provider before filing for bankruptcy.

Credit Counseling: Free Help for Overextended Homeowners

Credit counseling agencies can offer homeowners advice on managing their money and debt, helping them develop a budget, as well as offering educational materials and workshops.

Credit counselors should be certified and trained in consumer credit, money and debt management, and budgeting. They should also be able to help homeowners assess their financial situation and develop a personalized plan to deal with their money problems.

According to personal finance expert Terry Savage, “Credit counseling may help by creating a debt repayment plan with your creditors. This program may not reduce your debt, but it can make it more bearable through negotiations with your creditors to reduce interest rates and “re-age” your debt. The process is designed to get you out of debt in five years or less. Fees for these plans are reasonable and are often waived or reduced.”

Credit counseling should have no impact on a homeowner’s credit report. Simply seeking advice will not be reported to a credit agency, however, if the homeowner commits to a debt repayment plan, it will be reported to credit bureaus, showing they have made an effort.

“Credit counseling helps you avoid bankruptcy. But sometimes bankruptcy is inevitable. If that is the case, most agencies will help you through the process, referring you to competent attorneys who will not make your debt situation worse. The bankruptcy code actually requires you to go through credit counseling from an approved agency before a filing can be made,” Savage says.

Credit counseling services are usually free because they are subsidized by credit grantors and credit card companies, who support non-profit credit counseling because it enables them to recoup outstanding debt.

Credit counseling

Credit counseling: A process where a debtor is advised on how to get rid of unwanted debt.

Credit counseling: A process that explores the prospect of repaying debts without resorting to bankruptcy. It also educates the debtor about credit, budgeting, and financial management. Under the 2005 bankruptcy law, a debtor must seek credit counseling with an approved provider before filing for bankruptcy.

Credit Counseling: Free Help for Overextended Homeowners

Credit counseling agencies can offer homeowners advice on managing their money and debt, helping them develop a budget, as well as offering educational materials and workshops.

Credit counselors should be certified and trained in consumer credit, money and debt management, and budgeting. They should also be able to help homeowners assess their financial situation and develop a personalized plan to deal with their money problems.

According to personal finance expert Terry Savage, “Credit counseling may help by creating a debt repayment plan with your creditors. This program may not reduce your debt, but it can make it more bearable through negotiations with your creditors to reduce interest rates and “re-age” your debt. The process is designed to get you out of debt in five years or less. Fees for these plans are reasonable and are often waived or reduced.”

Credit counseling should have no impact on a homeowner’s credit report. Simply seeking advice will not be reported to a credit agency, however, if the homeowner commits to a debt repayment plan, it will be reported to credit bureaus, showing they have made an effort.

“Credit counseling helps you avoid bankruptcy. But sometimes bankruptcy is inevitable. If that is the case, most agencies will help you through the process, referring you to competent attorneys who will not make your debt situation worse. The bankruptcy code actually requires you to go through credit counseling from an approved agency before a filing can be made,” Savage says.

Credit counseling services are usually free because they are subsidized by credit grantors and credit card companies, who support non-profit credit counseling because it enables them to recoup outstanding debt.

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