What is Consumer Credit Counseling?
When you are drowning in debt, you may be searching for any way out. If you do a search for paying off debt, you may see a lot of ads for credit counseling. Credit counseling can sometimes be beneficial for those who are trying to take control of their credit card debt and have the income to create a realistic plan for repayment in the very near term.
What Is Credit Counseling?
Credit counseling is a process in which you meet with a financial counselor who can help you organize your finances, determine a payment strategy, and if needed, consolidate your debt. However, credit counseling is rarely able to reduce or eliminate debt as bankruptcy can. Leinart Law Firm can assist you in many areas including credit card debt, tax debt, medical debt, and home and car arrears. As bankruptcy attorneys, we have the knowledge necessary to inform you about all your options.
Many of our clients find themselves in a worse financial situation after trying credit counseling. There are reports on a regular basis in the media of unscrupulous people entering this unregulated industry. Recently there have been hearings in Congress about this potential consumer fraud.
Beware of Shady Agencies
You may see advertisements for credit counseling agencies that vow to help you erase your debt, repair your credit, but often these companies do not have your best interest in mind. As debt attorneys, we are ethically bound to have your best interests at the forefront of everything we do. Remember: if it sounds too good to be true, it probably is.
Consumer Credit Counseling or Bankruptcy
Many clients come to us weighing their options between credit counseling or filing for bankruptcy. As experienced bankruptcy attorneys, we have the knowledge and expertise to do the proper investigation into your finances to determine if bankruptcy would be a good option for you. Credit counseling is a great option for those who don’t qualify for bankruptcy but still would like help to get their debt in order.
How to Know if You Need Credit Counseling
It may be hard to ask for help when it comes to debt, but credit counseling can really change your life. Just having a bit of debt may not require the help of a professional. However, if you are feeling as if you are drowning in debt, living paycheck to paycheck, and struggling to meet minimum payments, credit counseling may be for you.
Frequent Debt Collector Calls
One sign that you may need to seek the help of a consumer credit counseling service if some of your debt has gone to collection. These calls often are frustrating and stressful for people. Most professionals agree that it helps to contact a credit counselor before things turn to collection.
Paycheck to Paycheck
If you don’t have any money left over at the end of the month, you need to attend credit counseling. This is a dangerous situation that can leave your family vulnerable to financial ruin. Any sort of additional financial hardship and you will quickly fall behind on everything.
Affecting Personal Relationships
Having lots of debt is stressful on the entire family. It limits your choices, causes tension, and often is the cause of many divorces. If debt is causing arguments with your spouse or family members, seek credit counseling for help.
Maxed out Credit Cards
You should never hold your credit card at a maxed out level. That is recipe for credit score disaster. There are smart ways to use credit to your advantage, although many people end up with it as a detriment. Credit counseling can assist you in getting your credit cards under control.