Credit counseling agencies are nonprofit organizations that intend to help debtors to resolve their debt issues by providing counseling and education on consumer credit, money, debt management, and budgeting. And, most of time, debtors are advised to enroll into a debt management plan so that they can follow the plan to work out of debt. Debt management plan proposed by reputable and legitimate credit counseling agencies do serve the purpose.
But, beware that many very attractive debt management plans offered by companies who called themselves credit counseling organizations are actually scams who are trying to cheat your money and worsen your debt situation. So, how could you avoid yourself from falling into these traps? Let go through 2 scenarios that you will potentially faced when approaching a credit counseling service which may run by scams.
Scenario 1: Propose A Debt Solution Without Analysis Your Financial Situation
When you consult a credit counseling agency, the counselor suppose to analyze your financial situation by understanding all your debts, expenses and financial affordability before he work out plan that best fit your financial situation. If you found that your counselor is not paying attention when you explain your financial difficulties and he did not ask you the questions to get further understanding on your debt problem. What he is trying to do is propose their best debt management plan to you with a number of guarantees that your debt issue will surely be resolved if you enroll into the plan.
Don't ever trust him else you will regret once you sign up and hand over your money. And, after that found out the propose debt management plan does not fit your financial situation. Avoid yourself from credit counseling agencies that propose to your one debt management plan that fit all financial situations. They just want to earn your money without really help in your debt problem.
Approach other credit counseling agencies and get one that really care about your debt problem, educate you on the cause of your debt issue, tell you what are your options based on your current financial status and guide you on the best debt solution with or without a debt management plan.
Scenario 2: Charge You An Upfront Cost Or The Fee Is High
The rule of thumb, credit counseling services are free of charge but most debt management plan (DMP) offered by credit counseling services have certain fee. The fee of DMP should be deducted directly from your monthly payment and it should not be too high; the reasonable fee should be plus minus $50. If you are asked to pay an upfront cost during sign up with the debt management plan, then it better to reject the plan and approach other credit counseling agency.
Beside that, before you sign on the agreement for the propose debt management plan, remember to check in details for any other hidden costs. There are unethical companies hide other costs to make the plan very attractive. These hidden costs will be written in the agreement. Unfortunately, most people won't read the agreement in details when they sign on the dotted line. If you are unclear or need more time to read through the terms and conditions stated in debt management agreement, request to bring the agreement back to home for reading and sign back to the company if the terms meet your requirements.
Summary
Reputable and Legitimate credit counseling agencies are organization that help debtors to reduce and resolve their debt problem through counseling & education. They may recommend you to enroll into a debt management plan if your case really needs one. Whereas, credit counseling agencies run by scams care more on their profits than your debt problem. You should smart enough to differential them and avoid yourself from these scams.
Related Articles
Debt Solutions - your 12 Ways Out From Debts (part 4)
By: Cornie Herring | 17/12/2006 | Debt Consolidation
Being in debt is no fun, especially if you are struggling to make ends meet. Because debt is a complex issue but there may be more than one solution. This article will outlines 12 common methods use by most of debtors to get rid of their debts. Find out these 12 debt solutions from here.
6 Debt Management Tips for Debt Relief
By: Cornie Herring | 05/03/2008 | Debt Consolidation
Debt management plan (DMP) is a special program introduced by most credit counseling agencies to help the serious debtors work their way out of debt. But not all debts can be included in a debt management plan. Although you have chosen to enroll into a debt management plan, you must do your own debt management for other debts that are not included into the DMP. Here are 6 debt management tips for you to work toward debt relief.
How to Pay Off your Payday Loan
By: Cornie Herring | 30/10/2007 | Debt Consolidation
Are you trapped in payday loan cycle? You get new payday loan to cover your existing payday loan and it keep repeating until you are overwhelming. If you are, you are not alone. Many people take out their first one hoping to pay off in full in the next payday, but end up with taking out more loans and scrambling to cover one loan after another until their debt reach to the overwhelming level and don't know what to do. How to break this payday loan cycle and pay off the payday loan?
How Debt Consolidation Work to Save you From Debts
By: Cornie Herring | 03/12/2006 | Debt Consolidation
If you're feeling overwhelmed about your debt, you're not alone. According to the statistics, over 40% American families spend more money that they earn and the average American household has nearly $10,000 in credit card debt. Get to know from this article how's debt consolidation can save you from debt.
Is There a Way to Get Out From Debt
By: Cornie Herring | 23/12/2006 | Debt Consolidation
Are you burdened with debts? Are you finding it harder each month to meet the payments on your debts? Is your frequency of late payment or miss payment increased? These are the signs of financial crisis; you need to do something to avoid dragging yourself into this finance disaster where your unbearable debts may course bankruptcy in the worst case.
Debt Consolidation Provides an Effective Solution to Lower your Debt Burden
By: Cornie Herring | 12/09/2007 | Debt Consolidation
Based on some research predictions, a credit refusal will rise to 8.6 million in 2011 from 7 million recorded in 2006 due to the rising of interest rate. If you have debt burdens, now has to be the best time for you to re-examine your debt issues and get it in-control by reducing the interest rate of your debt.
An Easy Way to Eliminate your Credit Card Debt
By: Cornie Herring | 25/12/2006 | Finance
There are millions of Americans out there who have paid off heavy credit card debt, and you may be one of them. To get rid of credit card debt, it won't be enough, however, to just make minimum monthly payments. Do you know that you just need to do a little more than just paying the minimum monthly payments; you can save thousand of interests and shorten many in years in settling your credit card debt.
Student Credit Card Debt Consolidation Guides
By: Cornie Herring | 17/04/2008 | Debt Consolidation
Students buy things with credit card but paying just the minimum due each month are common these days. This is why today's many students are in debt due to credit card. If you are one of them, you should know that if you pay just the minimum amount due each on your credit balance, the balance will be charged with interest and the amount of credit debt that you incurred could grow to outrageous proportions.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Suppose you have debt can the person you owe money ...
By: Cathey | 10-07-2008
Suppose you have debt can the person you owe money too attack a joint checking account if that is all the money that goes in the account is from socail security?
Debt settlement
By: Dorothy | 10-07-2008
should i negotiate with credit card co. or use a debt settlement co.
I filed chapter 13 which included a personal loan ...
By: JLEN629 | 04-05-2008
I filed chapter 13 which included a personal loan where i put my car up for collateral. The car is now totaled. Who gets the money from the insurance me or the lien holder?
I want to pay off my credit card debt, but i am ...
By: preston01 | 09-04-2008
i want to pay off my credit card debt, but i am unsure which collection company i owe to. how do i find out how to pay it off?debt collection
My husband and I are traveling in a tornado of ...
By: purple08618 | 30-01-2008
My husband and I are traveling in a tornado of debt and we don't know what to do. I want to quit my job so I can stop my daily commute to work and the day care fees. Our expenses (mortgage, car payments, utilities, overdue bills, daycare, aftercare etc., etc.) averages in at 5,400 and we only bring in 4,200. Even if we were to get a part time job (don't know how because of our timing) its not raking in the dough. We've already taken distributions out (which we knew was bad) to put for our house and we needed the money. What should we do? Help
So working with CCCS will help me repay my payday ...
By: n2060 | 01-11-2007
so working with CCCS will help me repay my payday loan ?
Q&A Powered by:
Latest Debt Consolidation Articles
Discover How to Consolidate Bills Quickly and Effectively
By: Abhinav Sidana | 19/07/2008
People say that bills are part of almost everyone’s life. That’s true. No matter how rich or famous you are, you will still be compelled to pay your bills. Sometimes, the richer you are, the bigger your bills are. But even if everybody is as indebted as you are, it does not mean that it’s all right to feel suffocated as your payables pile higher and higher.
Debtors are a Risk for Business
By: gcs-group | 17/07/2008
Any business that wants to expand will find itself having to offer credit to its customers either private or corporate.As with all risks this risk of having debtors not pay their accounts can be managed and the Risk Manager’s of this risk are Credit Managers and / or Credit Staff and Debt Collectors.
Christian Debt Consolidation: an Ethical Way to Reduce the Debts
By: Tom Frederick | 17/07/2008
Ensure a divine life for yourself with Christian debt consolidation loan package.
Debt Consolidation Agents Need to be Supervised
By: Melissa Kellett | 16/07/2008
Debt consolidation is a complex process and the aid of professionals is almost always needed. However, it is smart not to confide too much on the consolidation agents and keep an eye on whatever they do with your debt. A proper supervision of their work can save you a lot of trouble and probably money too.
Common Mistakes When Hiring Debt Services
By: Melissa Kellett | 16/07/2008
Most people who need to resort to some kind of debt relief aid, lack the information necessary to make conscious decisions. This eventually leads them to making serious mistakes when choosing debt services and sometimes their situation worsens due to these mistakes. If you debt has gone out of hands and you need aid in solving your problems read on. Here you will find the basics to avoid these common mistakes.
California Debt Management
By: Ronnica Rothe | 16/07/2008
The state of California allows for debt management to be done both by for-profit and nonprofit companies. This allows Californians to have access to a wide range of credit counselors. Wisdom will need to be exercised to avoid falling into the hands of someone who does not have your interest at heart.
Ways to Negotiate Debt Settlement
By: Christina Costa | 16/07/2008
Are you looking for ways to get out of debt? Not sure where to start? There are many possible ways to negotiate debt settlement. What is important to remember, is that each person and their debt is different. Make sure you do what is best for you!
Tips For Getting Out of Debt
By: Christina Costa | 16/07/2008
Many people find themselves in debt, yet very few know how to get out of it. Whether you decide to do it on your own or turn to a debt settlement company, there are a few things you must think about first!
More from Cornie Herring
Debt Relief Options - Overwhelming With Debt is not End of the Life
By: Cornie Herring | 27/06/2008 | Debt Consolidation
Many debtors do not understanding their available options in handling their debt issue, which led some of debtor chooses the extreme and unwisely decision to pay off their debt with their life. There are many options available which you can use to bring your overwhelming debt to a comfortable level while working your way out of debt. Life is your only asset that can't be repay if it is lost, so don't use it to pay your debt because debt can be payoff with other options.
Debt Relief Advice - Gambling is not a Way Out of Debt
By: Cornie Herring | 07/06/2008 | Debt Consolidation
Gambling is an entertainment for people who have money to lose as there is no guarantee for winning at casino. Don't make your debt condition worse by trying your fortune at casino because you can't afford to lose if your purpose of playing at casino is to resolve your overwhelming debt issue. There is a better option to resolve your debt issue.
Debt Relief Advice - Gambling is not a Way Out of Debt
By: Cornie Herring | 04/06/2008 | Debt Consolidation
Gambling is an entertainment for people who have money to lose as there is no guarantee for winning at casino. Don't make your debt condition worse by trying your fortune at casino because you can't afford to lose if your purpose of playing at casino is to resolve your overwhelming debt issue. There is a better option to resolve your debt issue.
Debt Relief Tip - You Can Pay Off Your Heavy Debt Easily
By: Cornie Herring | 13/05/2008 | Debt Consolidation
Most people will get another loan to pay off the current debts through a debt consolidation process. It's a good option to bring your debt from stressful level to a more controllable and manageable level. But, there is another option that most people miss out. Find out here.
Beware of the Warning Signs of Too Much Debt
By: Cornie Herring | 05/05/2008 | Personal Finance
Using credit and good debt can be very powerful to allow you to buy a home, a vehicle, or send your children to college, and provide leverage for other purchases. But if you accumulate too much debt, it can pose a serious debt issue. Keep yourself alert with the warning signs of too much debt as stated below, so that you can handle it as early as possible before it become too serious to address.
Student Credit Card Debt Consolidation Guides
By: Cornie Herring | 17/04/2008 | Debt Consolidation
Students buy things with credit card but paying just the minimum due each month are common these days. This is why today's many students are in debt due to credit card. If you are one of them, you should know that if you pay just the minimum amount due each on your credit balance, the balance will be charged with interest and the amount of credit debt that you incurred could grow to outrageous proportions.
Is it Possible to Get a Personal Loan With Bad Credit?
By: Cornie Herring | 05/04/2008 | Loans
Personal loan can be a life saver for you if you are facing a huge tax bill, unexpected but important expenses such as medical and car repair bills. If you have a good credit score; you should have no problem in getting a personal loan to overcome you current financial disaster, but if you have a bad credit score, you might worry whether you are possible to get a personal loan to resolve your current financial hardship.
Credit Repair Tip - Why You Need to Improve Your Credit Score?
By: Cornie Herring | 01/04/2008 | Credit
Credit score is not just a number. It is a measure of your financial capability and healthiness. It can affect you everything from whether you qualify for a loan to the approval for an insurance application, up to whether an employer will hire you. If you do not have a good credit score, you must make a plan to improve it, else it can be costing your dearly.
Finance 
