Are you flirting with the idea of debt consolidation? If you are, then buyer beware. You could end up in an even worse financial situation than when you started. IN the 1990s, the debt consolidation industry blossomed and boomed into existence. The reality is that many fantastic and helpful non-profit consumer counseling services were created. But on the tails of those helpful companies came other, less ethical entities. Instead of becoming one of the many individuals who falls prone to debt consolidation or consumer counseling, please take into account the following:
BUYER BEWARE
- Avoid large up front fees -- Non-profit consumer counseling services will not ask that you provide astronomical upfront fees before they even begin to help you.
- Check their non-profit status -- Many consumer counseling services are non-profit entities. These are the ones that may be better to work with. However, be aware. Many of these so called "non-profits" will force you to work with their "for-profit" sister companies.
- Do your research -- Before you sign you financial life away, please do a little research. Know that consumer credit counseling will show up on your credit report. Also, check with the Better Business Bureau in your area or even do an internet search looking for possible criticisms of the company that you want to work with.
- A Full Press Approach -- Real credit counseling services will not only help you get your credit card debt and payments under control. They will help you figure out a financial plan that deals with the whole picture: your spending, your bills, your credit.
KEEP IN MIND
Remember, it took a while to get into consumer and credit card debt. It will take a while to get out of it, too. There are no easy or quick fixes. In order to get out of credit card debt, it will take years of hard work. Taking the easy way out will only end up negatively affecting your credit history and may actually cost you more money and negatively affect your credit in the long run. Additionally, keep in mind that many of these companies are not government regulated to the extent that they should or could be in order to protect you, the consumer.
THE SOLUTION
The solution remains easy and clear. Avoid trying to find a way to make these problems go away overnight. Instead, figure out a way to understand basic personal finance. To understand how to save money and create a monthly working budget. For some, bankruptcy or negotiating your bills with creditors may be the only way out. For others, though, the way out might be a journey of financial self-exploration with legitimate credit counseling services. Decrease your expenses so you can increase your credit care payments.
J. Richard Shanley has published an eBook designed to help beginners get control of their financial life. "You and Your Money: A Primer" can be purchased at MollysBrother.com. Additionally, he has a FREE online personal finance e-course. Each week you will receive an email helping you understand or master an aspect of personal finance. Sign-up now! Space is limited.
