As a borrower and consumer you may one day find yourself in a position whereby you require some assistance from a credit card debt elimination agency. There are many agencies that provide counseling to borrowers who are deep in debt (bad debt) because of their credit card expenditures. It’s very easy to let your spending get out of control with credit cards, and you may find that you need some kind of relief – and fast. Try not to worry. You are doing the right thing by looking for a counseling agent, and once you find an agency close to where you live, you will be extremely relieved after your first visit to their office – I guarantee it, because I used a debt relief company to clean up and pay off all by credit card bills. It’s a huge burden off your financial shoulders – so to speak. This is a rather in-depth article of information all about the process of reducing your credit card debts, getting help from counselors, and finally eliminating all your CC debt for new start and a second chance. You will find this information to be accurate and vital if you have been swimming in credit card debt for months and years. This is a fairly long read.
Getting Help to Reduce Your CC Debt – Bravo!
The best thing you have ever done in regards to your mounting credit cards debt(s) is seeking help. The fact that you have ventured on to the Internet to find help, is a good sign that you are finally beginning to take full responsibility for your finances, your debts, your monthly budgeting, and your overall personal finances. It takes guts and brains to put all your finances in the mirror for a close examination of your monthly income, your monthly bills, and the actual debt you are carrying on your credit cards. Did you know that many people who have bad credit ratings and have more than three credit cards don’t even know how much they are paying interest each month on each card – let alone understand the total debt they are accumulating every month and every year.
So yes – admitting to yourself that your credit card debts are way out of control, and that you can’t recover financially without help, is the first step in finally getting on with your life. You are going to feel so much better when you start getting some outside help from a professional in the debt reduction field.
Also, you will find that these counselors really do want to help you succeed with your recovery, and they are very much decent human beings like yourself. Most CC debt counselors will try and make you understand that your situation anything but typical – they will try and assist you first by removing your feeling of shame that comes with having out of control debts. You are not a bad person because your spending habits are misguided. Credit counselors know this, and have helped countless numbers of people just just like you.
Consumer Credit Card Debt Counseling Only
For the duration of our discussion, I want to make it clear that we are talking specifically about consumer CC debt counseling, and not business entities. This is for your average person who has let numerous credit cards blow up into unmanageable debts.
Debt Recovery Process
The debt recovery process is usually, in theory, not complex. However, each and every debtor has a different financial situation to manage. First off is the amount of debt the client is carrying on all their cards, and how much interest they are paying off on each card every month. This alone is the first financial information a counselor has to get from you. This is the first step in the process on your way to debt recovery. From there your counselor with determine exactly what your best action(s) to take, and in what order to take them in.
This process of calculation is handled by debt relief counselors using the same software and there is nothing personal about this small step. It’s simply a numbers game whereby they instruct you on your total debt, and how much you will need to borrow to consolidate all your credit card debt down to one lower interest loan payment – usually on a monthly basis, but some counselors may suggest you making your payments on a bi-weekly schedule.
Once the counselor uses their agency software to figure out your responsibilities they assess what your monthly (or yearly) income is, and this includes wages, and all other sideline income you may have. Your counselor will be adamant (in a nice way) that you are completely up front about your total income. They want you to start being totally honest with yourself when it comes to your monthly responsibilities and your actual monthly income. Just because you made a little bit of extra cash money for a couple of months this, does not mean that counts as some sort of steady income your are receiving – and able to pay off debt with.
After your counselor has gathered all of the above information, they will begin to start making suggestions in an effort to provide you with prudent and wise guidance that you can hopefully follow (at least consider) going forward. They will then begin the process of finding a consolidation loan using a lender that will give you the lowest possible interest rate on the note. There is always a problem when you have a poor credit rating, because it makes it very difficult for the agency to find a low interest loan for you – but they do their very best.
Once all of these steps are completed, your counselor will do one last thing on behalf of the agency. They will provide you with reading material and workbooks as tools for learning and developing good fiscal health. Counselors will always verbalize to you that your financial recovery is going to take time and patience. They tell you what to expect as far as a timeline for recovery, and how your credit rating will be temporarily impacted.
Complete Debt Elimination
To completely eliminate your credit card debt you need to listen to your debt relief agent and follow all of their advice. It comes down to a dogged determination for months and years to come. If you are serious about a complete and utter elimination of all your debts (we’re talking only about bad debt here right, because some debt is considered good) you will have to make sure you never apply for extra credit cards, department store cards, or gas station cards. You must not apply for any large overdraft protections, and not apply for another line of credit.
Also, the only consumers and clients of these debt counseling companies that succeed in the long run, are those that change their spending and budgeting habits forever. It’s almost like AA – you may have to change your lifestyle all together. Change your activities which is almost certainly the case for most people who have let their credit card debts get way out of hand. You will perhaps have to change your peer group because those places you went (like Casinos and Bars possibly) are where your bad wasteful spending takes place.
When we take about completely eliminating bad debt we are taking about never accumulating high risk debt again. This means that for the rest of your life, you adhere to a balanced budget, and a sober spending regiment. You can learn to have fun in life and be very active without spending a red cent. You don’t have to have the coolest car on the block or the trendiest clothing to live a rich and fulfilling life. A refreshing walk in the park and good book is allot more rewarding that 7 hi-balls and 4 hours at a slot machine with a cigarette hanging out of your mouth. (by the way, don’t get me wrong – I’m not assuming that you are a broken down train wreck – just using the most wasteful way of spending money) It makes me shudder when I see someone hand over their credit card to a bartender and tell them to keep it until they leave.
Services Provided By Agencies and Counselors
Services that debt counselors and their respective agencies provide can vary. I know that I told you that all of their counseling services are similar, but now I must elaborate a little bit on the difference service. Remember that you are paying for their help, and they are running a profitable credit repair business. Some companies will claim they are non-profit, but is never the complete truth – you know that right?
Some of the different services provided by debt recovery counselors are as follows;
- debtor assessment (total debt calculation)
- income assessment (what you make each month in take home pay)
- consolidation loan procurement
- budgeting and planning
- worksheets and exercises (here is a good online worksheet)
- consoling and comforting
- stress relief
- credit score calculations (Transunion, Experian, and Equifax)
- credit card usage (limits, monthly payment amounts)
- retirement planning
- payment scheduling
- future planning to avoid high debt again
Using the Internet to Find Credit Card Debt Loans
One of the common methods of looking for credit card debt loans is searching the Internet, and that is how you ended up reading CLF, but actually using the Internet to apply for consolidation loans should be a last resort. Contrary to our traffic numbers, it’s seems that thousands of debtors are using the Internet as a first resort. Using Google, Yahoo!, and their ugly cousin Bing, will produce millions of lenders who will offer to approve your consolidation loan, but at what cost?
The cost is big and I’m talking about interest payments on the principal here. Many of the lending examples on this site show how much interest some of these online loan providers are charging – it’ scary, and you really don’t have a perfectly transparent view of what your financial responsibilities are going to be over the term of the loan. By the time you add on closing fees, possible late payment fees, opening fees (administration), and ballooning interest, you could be paying over 300% of the principal over the during of the term.
In July, 2010 the congress of the United States passed new financial regulation bill that requires all credit card companies to be completely transparent in respect the TRUE cost of their services, and the same regulations force debt consolidation lenders to be crystal clear in their presentation of their different lending products – a good thing and a good start. The same goes for Payday Loan companies.
Debt Management
All CC debt relief counselors instruct you on the best debt management structure to go use. They’re experts when it comes to dealing all different kinds of credit debtors and and the different credit card companies. Their only goal is to educate, guide, encourage, and instruct you on the best possible way to manage all your current debts, and soon to be GONE debts.
Debt management is really just all encompassing approach to handling your personal good debt load, and your shrinking bad debt load. Debt managers are really just personal financing and debt counselors said in different way, with different terminology.
Credit Card Debt Settlement
If your credit card debt is so far out of control, that you are on the verge of personal bankruptcy, then you may have to have your counselor bring a trustee to the rescue. The trustee is just an attorney acting on your behalf, so that you only have to pay back all the credit card companies pennies on the dollar. The debt relief agency has their own in-house attorneys who handle debt settlement negotiations with the credit card companies every day – all day.
A credit card debt settlement will certainly damage your credit rating further in the short term, but in the long run it’s much better than claiming personal bankruptcy – much better – believe me on this! The agencies attorney(s) will negotiate all of your separate debts with each CC company, and then use your consolidation loan taken out by his or her agency to pay them back the agreed upon percentage of debts you were responsible for. You may or may not be a good candidate for a CC debt settlement process, but don’t sweat it – your counselor will let you know if this is the course of action you should take.
Government Credit Card Debt Relief Programs?
The bad news is that there is no such thing as a Government program for credit card debt relief. Only private sector firms offer true CC relief programs, and these are kinds of attorneys, agencies, and counselors we have been discussing today. There are thousands of debtors who think they can find somewhere online to apply for a Government grant to pay off credit card debt. They’re chasing ghosts.
There maybe a debt relief program in the works, if Obama and the Democrats get their way, but that is not likely if you understand anything about American politics – the Senate, the House of Reps, the Presidency, and the history of legislation in the congressional bodies.
The best I can do for you in the way of Government help with your credit card debts, is to direct you to their web page that gives you some worthy advice. The Gov article is entitled, Knee Deep in Debt, and I strongly urge you to read it in it’s entirety. Take special note of the bit on debt consolidation. They keep it short and sweet, but the most important part thing to remember is the sentence, “If you can’t make the payments — or if your payments are late — you could lose your home.” Never forget that bit of information, and be on the look out for predatory lenders. You have to make sure the agency helping you recover from your credit card debt is a reputable lender.
Remember that some of these agency wear many hats on your behalf;
- counselor
- attorney
- trustee
- escrow manager
- debt consolidation lender
- teacher
- consular
- baby-sitter
Finding a Reputable Credit Card Relief Company or Firm
As you can see by you are placing allot of trust in the firm or company you choose to help you recover from high credit card debt. So it’s critically important that you find a trustworthy and reputable firm, and not get ripped off by some of the scam artists out there that claim to remove all your credit card debt in a 24 hour period. If ANY so-called CC debt relief experts claim they can get rid of all your credit card problems in 24 hours, run for the hills.
You can use the Internet to look up complaints, rip off reports, BBB (Better Business Bureau) reports, and client customer reviews, to get the skinny on these companies. It would be wise to check out a potential company on your State’s Attorney General web site. Every State has some kind of local consumer protection agency you can utilize to make absolutely sure you are not going to be the victim of an elaborate debt relief scam.
This is a situation when the Internet SHOULD be used before entering into a legal binding contract with a CC debt relief agency. You need to find out debt relief companies are even allowed to operate under the law in your State. Some States don’t even allow this kind of private company to operate within their borders – most do. Then you need to find out if the debt relief firm IS fully licensed and how long they have been licensed for.
Once you have determined that the debt relief organization is legitimate, fully, licensed, reputable, and scam free, you can go forward and make ab appointment with their first line of representatives. Keep your eyes and ear open, and to be even more careful, get a second attorney that is no way connected to their firm, and ask him or her to read the contract. They will certainly find out if the contract is fair and scam free.
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