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CREDIT COUNSELING
Credit Counseling was established to help provide modest relief to consumers who cannot pay their existing credit card debts or keep up with the Minimum Monthly Payments. Also referred to as Debt Management Program (DMP), the debt relief provided to consumers in a DMP program consists of reduced interest rates and often the reduction or elimination of penalties. Credit Counseling does not reduce the amount owed, it restructures the existing debt.
Credit counseling can advise you on managing your money and debts and help you develop a budget. It can also develop a plan to pay back your debts. Credit counseling does not involve reducing or eliminating the debt you owe. Most credit counselors are non-profit and offer services at local offices, online, or on the phone. But be aware that “non-profit” status doesn’t mean that services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, others might urge their clients to make "voluntary" contributions that creates more debt.
Credit counseling will never give their clients what they need most, which is significant balance reduction. Negotiating with creditors is not a do it yourself job. Competent expertise is required when negotiating for large reductions in what is owed. Those reductions along with a good and reasonable plan are what make getting out of debt a reality. Newport Consumer Law believes that working with an experienced attorney is the safest and smartest way to reduce your debts.
Common Credit Counseling Concerns:
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Credit Counselors create debt management plan with full repayment of principal balance (DMP) as your only option.
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The information you receive isn’t always provided by someone with expertise and experience.
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The fees may not be affordable.
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Verbal promises often don’t make it into a formal written agreement.
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Not licensed to offer financial services in my state.
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The fees vary depending on what services you sign up for.
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