Credit Counseling Agencies: Good Or Bad? By Debbie Dragon At Isnare.com Ezine Articles

There are many different opinions from financial experts and consumers regarding the use of Credit Counseling Agencies in order to help get out of debt. Some will tell you it's the best thing you can do for yourself when you've gotten into uncontrolled debt, while others will warn you to stay as far away from a credit counseling agency as possible. How can you make the decision whether or not to work with an agency or not?

Research

If you are considering signing with a credit counseling agency to help manage your debt, you need to research. Don't join the first company you find without comparing their services to other companies, or checking their reputation. Here are a few questions you should ask of any credit counseling agency you are considering working with:

• Is the Agency a nonprofit organization?
• How is the monthly payment determined?
• How much money will each creditor receive each month, and on what date will they receive payment?
• What will your interest rates on your existing accounts be once enrolled in the Credit Counseling Agency's program?
• How much money does the Agency receive each month out of your monthly payment, and what is it used for?
• What happens if you decide you want to cancel?

These are important questions you should ask of any Credit Counseling Agency before making a decision. If your monthly payment is going to be $300, and $100 of that goes to the Agency for their services- are you really saving money by working with this company? Couldn't you send that $100 to one of your creditors on your own, and help reduce the amount you owe? If the amount is minimal, say $20 on a $300 monthly payment, it may be worth working with the Agency if they are able to reduce your interest rates on your accounts so that more of the payments are going towards the debt rather than new finance charges.

Possible Self Negotiations

What most people don't consider is the fact that they can call each of their creditors on their own, and ask to work out a new payment arrangement. If you explain you are having difficulty and are considering going to a credit counseling program or bankruptcy, there is a possibility that they might work with you and lower the interest rate that you're paying, the minimum monthly payment, or both! In fact, you may be able to negotiate better terms than a credit counseling agency since creditors basically have a process that they follow when working with the agencies, and working with an individual may afford a little more flexibility and work out in your favor.

Better Business Bureau

When you've just about decided that you are ready to work with a specific credit counseling agency, your final step before enrolling should be to check out the company's reputation with the Better Business Bureau. This is where you can find out about complaints made about the company by consumers like yourself, and decide whether or not you think they are an honest company worthy of your business.

After Enrolling with a Credit Counseling Agency

Your work doesn't stop after you've enrolled with a credit counseling agency. You will want to review your account statements each and every month, to make sure that they are receiving payments from your agency on your behalf. There have been horror stories of individuals who enroll in credit counseling agencies, send their payments in month after month, and the agency never actually submits the payments to your creditors, or they do so late all the time which results in late fees and eventual termination from the program!

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=55999&ca=Finances

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.