There are a number of credit card consolidation debt reduction agencies that can help you get the help and advice you need from your overwhelming credit card debt. There are two major nonprofit credit card debt relief trade groups — the National Foundation for Credit Counseling (NFCA) and the Association of Independent Consumer Credit Counseling Agencies (AICCCA) that are good choices for you to associate with. Unfortunately, just because an organization uses the title “nonprofit” does not mean it is trustworthy. Unfortunately, many so-called nonprofit companies advertising credit card debt relief are under investigation by the Internal Revenue Services, various states’ attorneys general, and consumer advocacy organizations for using unfair practices and making false claims. In order to avoid the illegitimate nonprofit credit card debt relief agencies, be sure that you ask a lot of questions and get the facts before you go with your credit counseling.
Finding More on Credit Counseling
Did you know that most credit card debt reduction counseling companies are actually underwritten by banks and credit card companies. That’s because one of the things these companies do is help consumers work out debt management plans (DMPs) that will provide for full repayment (usually) of the balances owed. Since the credit card debt is unsecured, the credit card companies know they will be last in line to receive money if a consumer files bankruptcy. The companies therefore encourage credit counseling and want their customers to enter into a DMP. Since there are great benefits that the company and its customers can get with their association of a nonprofit credit card debt relief company, they will stop the collection calls and the payments will be “re-aged” and the late payments are taken off the credit reports.
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Credit Problems
Most DMPs are five-year programs. You have to make all payments on time and keep at it for five years, at the end of which your debt is paid and your credit report is clean. If you miss payments during the five years, you will see a notation on your credit report and you will still have debt. Be sure you ask about fees for the program and get a written schedule of fees that you can compare with other competitors. Ask questions about their specific credit help experience and get references for your future nonprofit credit card debt relief program. Getting the right answers to these questions should help you weed out the unscrupulous operators hiding behind the “nonprofit” moniker.
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To Your Financial Success
-Suze Fulton
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