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First Stone Credit Counseling

Best Relief for Credit Card Debt: Credit Counseling or Debt Settlement?

While the United States economy has suffered from the home mortgage crisis, credit card debt has been bubbling up as the next witch's brew ready to bring its own potent poison to the table.

Credit card debt has been getting out of control for years, but the situation has worsened as other forms of credit have dried up. Home equity loans are no longer a ready cash cow for acquisitive Americans, and growing unemployment rates have more people tapping credit cards to the limit.

Credit Counseling and Debt Settlement

It's no wonder, then, that organizations that help consumers resolve credit card debt are extremely busy, serving thousands of new clients. There are two popular approaches to resolving credit card debt issues -- credit counseling and debt settlement.

Each helps clients by educating them in ways to get out of debt and stay that way, but the approaches are significantly different. The objective of credit counseling is to pay off debts in full by negotiating lower interest rates, while debt settlement companies pay off debts fast by negotiating reductions in the amounts owed. Here are the main differences.

Credit Counseling:
1. Negotiate reduced interest rate, pay off full original balances
2. Client pays monthly amount to counseling service, which makes payments to creditors
3. Monthly payments usually higher
4. Compensated by fees from lenders, 4-15%
5. Negotiate reduced interest rate, pay off full original balances
6. More BBB complaints
7. 83.9% of BBB complaints resolved
8. 21-26% reported success rate
9. Professional Associations: National Federation for Consumer Counseling (NFCC) and Association of Independent Consumer Credit Counseling Agencies (AICCCA)

Debt Settlement:
1. Negotiate reduced balances, then pay them off in full
2. Client sets up separate savings account, pays own bills from it
3. Monthly payments usually lower
4. Compensated directly by clients, 10-15%
5. Negotiate reduced balances, then pay them off in full
6. Fewer BBB complaints
7. 91.5% of BBB complaints resolved
8. 40-55% reported success rate
9. Professional Association: The Association of Settlement Companies

Different Approaches for Different Problems

But the biggest distinction is that these two approaches are designed to help people with different levels of debt. Consumers with credit card debt less than $7,500 probably should not consider debt settlement. In such cases, credit counseling or a do-it-yourself program would be a better approach.

But people who have amassed very high levels of credit card debt may find debt settlement the best way to clear the deck and get back control of their lives. Debt settlement companies that subscribe to standards of The Association of Settlement Companies (TASC) work toward paying off all balances in 12-36 months.

Debt Settlement Offers Alternative to Bankruptcy

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 all but eliminated personal bankruptcy for most Americans. When this option was effectively taken off the table, the contemporary debt settlement industry took form to meet the needs of consumers with exceptionally high levels of unsecured debt.

Let's be clear about this: debt settlement is not for everyone, but it provides a much needed alternative to bankruptcy for people who, for whatever reason, cannot meet their obligations. People who cannot make even the minimum monthly payments on credit card debts aren't likely to succeed with a credit counseling solution that calls for even higher monthly payments.

Criticism and Comparisons

For an industry with so much to offer the public, debt settlement has been subject to a great deal of criticism lately, primarily for two reasons: 1) the debt settlement industry is relatively new and not well understood; and 2) a few bad companies have sullied the reputations of the majority of legitimate, highly ethical ones. The industry is correcting both problems by establishing a higher public profile to raise awareness and understanding, and by sorting out the bad apples.

The credit counseling industry, led by the NFCC, is not at all reluctant to cast stones at debt settlement, perhaps even questioning the industry's right to exist. But a quick glance at the comparison above should alert readers to several concerns about credit counseling. Two in particular stand out.

First is the matter of who pays credit counseling agencies. Some have observed that they appear to be well-mannered collection agencies for the card companies, because creditors pay fees to them (which is not the case with debt settlement companies).

Then there is the matter of effectiveness. The credit counseling success rate of 21-26% lags well behind the 40-55% reported for debt settlement. If your financial future were on the line, which would you choose?

About the Author

Zack Anderson is president of American Debt Control, LLC, a full-service debt settlement company. Get Zack's special report "12 Questions to Ask Before You Hire a Debt Settlement Company" here now.

Debt Management Credit Counseling C

Credit Debt Solutions - Credit Counseling Vs Debt Settlements - Which is Better?

If your unpaid debt is haunting your sleep, it is time you seek credit debt solutions and receive some solace. When it comes to credit debt solutions, you have various options at your disposal. A layman, in financial matters, may not know the pros and cons of choosing a particular solution to his debt problems. A prudent choice can put an end to your worries; while a hasty decision can begin a series of fresh problems to attend. Both consumer credit counseling and legitimate debt settlement are effective tools to move out of debt. The choice depends on the seriousness of the problem.

Loan defaulters can rebuild their credibility in the market only after they have paid all their dues. Obviously, an unemployed or underemployed person finds it extremely difficult to satisfy his creditors. Debt settlement comes to your rescue, in such cases. A debt relief firm negotiates with your creditors to buy reduction on the borrowed amount. If your unsecured debt amount is more than$10k, you can opt for debt settlement.

A competent debt relief company can get a waiver of as much as 70%on the total debt amount. The credit card company will consider your case, favorably, if it is convinced that your financial status is not robust enough, to return the borrowed amount.

Consumer debt counseling is a useful way to receive education on the importance of financial planning. A disciplined life style and an organized pattern of expenditure can protect you from the predicament of being a debtor. A certified counselor can help you understand the efficacy of a monthly budget He also prepares a proper debt management program for his customer. He even negotiates with the lenders to sort out a loan repayment plan. This plan offers slashed fees, payments and interest rates to the debtors. You may also refer to a bankruptcy counselor who can convince you on the disastrous effects of proclaiming bankruptcy.

It is pointless to compare credit counseling with debt settlement. Debt settlement is a process of coming out of debt, while credit counseling is more of a tutorial that guides you to streamline your financial plans.

Debt settlement is a legitimate alternative to filing bankruptcy. If consumers are experiencing a financial hardship and have at least $10k in unsecured debt then debt settlement can be a legitimate way to eliminate up to 70% of that balance.

About the Author

www.debtconsoladate.com
is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.

http://www.debtconsoladate.com

Contact us for free debt advice = 8883613619

Credit Counseling Fact

Should You Opt for Credit Counseling?

This is a common fact that every one needs credit counseling at one point of time or the other in life. In the present-day situation, everyone faces financial crisis for during his or her life. They face bad credit situation and bankruptcy mainly because of their exaggerated expenses and personal loans. In these difficult situations, people need a professional guidance to overcome the situation. Credit counseling will be a helpful lesson for them when they are suffering from these situations.

Many counseling agents and experts can assist them in case of bankruptcy or in case of any other financial turmoil. Some times people take high amount loans and it causes a financial crisis in future because of the high interest rates. The counseling agencies help them to understand the investment policies and they will teach you how to invest and where to invest. If you take any instant loan for your personal investment then you must make it sure that the loan is the most suitable for you. If the plan under which you are taking the loan is not appropriate for you, it can lead you towards a financial crisis.

The credit counseling course is for the financial and investment education. The experts are there for you to make you understand the process clearly. If you take the help of the professionals, you can definitely avoid the financial crisis in the future. This credit counseling service is also for them who are facing any financial problem at present. The experts will show them the right path to overcome the situation. They will tell them the best way to get rid of the crisis. The credit counseling agencies provide many services. They can offer you debt repairing plans, bankruptcy avoiding plans, and many other important plans to get a healthy economical life.

Many other services are provided by various credit counseling agencies. You can have professional advices regarding your budget and credit. If you are thinking to take a huge Loan to fulfill one of your dreams, then the experts will tell you what will be the right choice for you. If you have huge debt in the market then your guide will tell you how to manage your debt. The experts also help you to get a credit card. The agencies provide credit counseling for all of your family members. Reverse mortgage counseling is also available as an essential service in the credit counseling agencies. You really need the assistance because it solves every problem that any one can face at any time regarding his or her financial career.

The credit counseling experts also help you by providing repayment plans. It is a fact that most of the people take loans for their personal or other use. However, a large number of them face a crisis when they have to repay the loan. It is only because they do not know the pros and cons of the particular loan agreement that they sign. The credit counseling professionals will help them to choose the right one for them and have a concrete plan to repay the entire loan.

About the Author

Usha Pradhan has completed her MBA in finance sector and currently working as financial author for cash loan by phone. She is contributing her knowledge on loan, cash loan, credit counseling. To know more about her please visit website www.cashloanbyphone.com.

How can I research a debt/credit restoration agency to see if they are legit?

My husband and I are interested in Gren Path Debt Solutions - we like the fact that they are local to us and can provide face to face financial counseling. They are also a non-profit (although they are a .com instead of a .org??) . However, how can I find out if they are really able to help us? What if they point us in the wrong direction? How can I research the company to be sure we are safe, and not digging ourselves deeper?

Sorry I'm not sure, but I must warm you, 99.9% of those companies are bad, even not for profit, so please be careful =/ My best advice would be search the companies name on Google along with "complaint" "ripoff" "scam" and see what comes up.

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The Facts You Need to Know About Debt Consolidation $6.97 Many people have countless credit cards that accrue high interest rates. By consolidating their debt into one low payment each month, they not only save money, but can also eliminate their debt, and there are many different ways to consolidate debt. Credit card debt seems to be at an all time high. And because credit cards are so easy to obtain, more people than ever are finding themselves in a fi...

Consumer Credit Counseling California

California Bad Credit Mortgage Related Information

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About the Author

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Government Credit Counseling

Credit Counseling Services - What is a Good Company?

The best credit counseling companies maintain an impeccable reputation.

When considering a service, inquire about the company’s certification and how many years experience counselors have. Ask about additional professional licenses. Check with the Better Business Bureau for reports. The finest companies welcome questions and provide detailed information in response to each question.

Hector Milla Editor of the "Credit Card Debt Counseling" website -- http://www.CreditCardDebtCounseling.biz -- pointed out;

“…The best credit counseling companies also maintain extensive libraries containing practical tips for preparing a budget, financial tips, lists of government resources and contact information, and much more. You should have unlimited access to all library information. This information is frequently available online for download…”

Counselors always evaluate each person’s financial condition. Everyone is unique and presents new challenges. You should receive open, frank and professional advice, based on years of experience helping people in need. For example, a counselor may recommend cutting monthly expenses, taking on a second job, or offer resources to assist you in finding a better paying job. The counselor must be able to explain, to your satisfaction, why each of these suggestions is a wise choice.

The effectiveness of credit counseling depends on the severity each person’s situation. Start early when problems become apparent, and you may find simple solutions are readily available. If you wait until you receive a notice of default, you options may be unnecessarily limited.

Lifestyle changes alone may not resolve past due debts and keep them current. In this circumstance, your counselor should offer expert advice on a broad selection of financial alternatives. These alternatives include debt management plans, debt settlements and potentially bankruptcy. Each counselor must be capable of discussing each of these the topics in detail, and provide full disclosure about the potential advantages and disadvantages associated with each option.

“…Working with a counselor should be a positive experience. The best companies monitor all counselors carefully, to insure their primary focus is helping you. If your experience is not positive, great companies want to know how they may correct a problem and offer better service…” added H. Milla.

Further information about how to get the most of your credit counseling process by visiting; http://www.CreditCardDebtCounseling.biz

About the Author

Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.

I really don't understand how to read my credit report. Is there any non-profit or government help out there?

I have a couple school loans. However, I have about ten entries from different companies on my report collecting these two school loans. I do not get any mail from these company because of my moves. I don't know who I should contact to start paying them. Is there any free credit help or counseling out there?
I have these credit reports already! I need help to fix my credit because I don't know which one to contact.
It is a government school loan. I really don't think that I can get away with the "7 years rule". They already took my tax return from me this year.

Here's a the Consumer Credit Counseling Service (CCCS) site: http://www.nfcc.org/ . They're a non-profit counseling service.

It sounds like your loans have been passed around to several collection agencies. You may want to start with the original creditor and see if they still own the debts or not. Sometimes collection agencies are just agents and sometimes they purchase bad debts.

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