Link to a forum : "Consumer Credit Counseling Service??"

Opening date of this forum : 05-19-2010

2 replies so far

Opening post of this forum : "After my BK discharged, I got behind in my mortgage payments.

I just caught it up this month and pulled the house out of foreclosure, payments are now current.

Today I get a call from Consumer Credit Counseling Service, asking to do a interview. They say they work for Freddie Mac and work as a mediation between homeowner and bank to modify mortgages, and such.

Has anyone heard of them, or had success with them?

I can't do the HAMP because my housing expenses are just under the 31% guidelines, so I am hoping these people can help with a modification. They say that they make recommendations to the bank on ways to keep the homeowner in the house, and paying.

Thoughts?"

see this forum

Article : Why credit counseling often fails?

source : articles.moneycentral.msn.com
By Liz Pulliam Weston

MSN Money

When people are overwhelmed by debt but don't want to file for bankruptcy, I typically recommend they make two appointments:

• One with a legitimate credit counselor, preferably affiliated with the National Foundation for Credit Counseling.

• Another with a bankruptcy attorney.
  
  

I make the second suggestion for a number of reasons.

One is that credit counselors and their debt-management plans, which are designed to pay off credit card debt over five years or so, are geared to steer people away from bankruptcy. Consulting with a bankruptcy attorney can help ensure that those struggling with debt know all their options.

The other, even more important reason: I know that even if you desperately want credit counseling to work, it often won't.

Here are the statistics, straight from the NFCC. Of the 3.2 million people who contacted NFCC agencies for help last year:

• About one-third were able to handle their finances on their own after a counseling session.
• Another third were either too far gone for debt management plans to help, with too little income or too much debt, or had problems credit counseling couldn't help and were referred to social services agencies because of issues such as a gambling problem, alcoholism or other addiction.
• The final third enrolled in debt-management programs (DMPs), but the dropout rate averages at least 45%. ...
  

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News : Consumer credit counseling may help uneducated parents regarding credit scores

source : debtconsolidationconnection.com
By Peggy Stillwell on May 7th, 2010

Many consumers may not know what affects their credit score, which may make it difficult for them to teach their children about proper financial management tactics.

According to a survey from ING Direct USA, 46 percent of respondents could identify no more than five of the 10 things that can lower a person's credit score. In fact, only five people of the more than 1,000 surveyed knew all 10 of the negative financial practices.

ING Direct USA chief executive officer Arkadi Kuhlmann said that parents who cannot identify the actions that can reduce a credit score may not be presenting a proper example to their kids.

"Also, parents could be overlooking some significant cost savings like lower interest rates that result by keeping their credit scores in check," Kuhlmann said. ...

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more debt consolidation news :
-Consumer credit counseling may help moms organize finances
-As students score low in financial literacy, consumer credit counseling may be option for education

Article : Consumer credit counselors – How do they help you?

By Sandy Thomson, your credit counseling news source

Many people don’t know that consumer credit counseling can work as a substitute to filing bankruptcy. Expert credit counselors can educate you on various financial topics and offer debt counseling services after thoroughly assessing your financial condition.

Once you sign up for the services of a consumer credit counseling agency, your debt level would be evaluated by a professional credit counselor. Subsequently, a repayment plan is worked out on the basis of your income and debt level. They would negotiate with your creditors to reduce your interest rates and establish a debt management plan that would help you get out of debt.

How does consumer credit counseling work?

While setting up a debt management plan, your financial situation is comprehensively assessed by the credit counselors. Given below are the factors that are primarily taken into consideration:

• Number of credit accounts you have
• The outstanding balances of those accounts
• The interest rates
• Minimum monthly payments
• Delinquent accounts (if any)

The credit counselor also takes into account how much you earn each month and how much you spend. Taking all these factors into consideration, a debt management plan (DMP) is created to pay off your bills. Every one of your creditors receives this suggested plan for acceptance purposes.

As soon as they agree to the suggested debt management plan, you need to start making payments to the consumer credit counseling agency. As per the DMP, this payment is allocated to your creditors. When you enter a DMP, your credit accounts are usually frozen so that you don’t run up new balances.

Fees of consumer credit counseling services

A host of credit counseling agencies maintain that they’re nonprofit in nature. Even though an agency declares themselves to be nonprofit, you shouldn’t by any means assume that their services are free of cost. More often than not, their services are available to you against a fee. The initial payment made by you might be used to compensate for the fees. On the other hand, some debt management companies might ask for a flat fee which is deducted from your monthly payment. ...

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Article : An Overview Of Consumer Credit Counseling

By LaToya Irby, About.com Guide

Consumer credit counseling is an alternative to filing bankruptcy. It is professional counseling that provides you with financial education and debt counseling according to your situation.

Once you consult with a credit counselor, the counselor will assess your debt level and work out a payment plan based on your income. Some credit counselors can negotiate lower interest rates and set up a debt management plan with your creditors.

How Credit Counseling Works

The credit counselor analyzes your credit situation including number of accounts, balance, minimum payment, balance due, and any past due account. The counselor then considers your monthly income and bills. Using this information, the counselor puts together a debt management plan (DMP) for paying off your debts. The proposed plan is sent to each of your creditors for approval.

Once your creditors agree to the DMP proposed by your counselor, you begin making payments to the credit counseling agency. The credit counselor disburses payment to each of your creditors in accordance with the DMP. In most cases, your credit accounts are closed to future charges as long as you are on the DMP.

Costs

A lot of credit counseling agencies claim to be non-profit. Even if the credit counseling agency says it’s non-profit, that doesn’t mean the services provided to you are free. In many cases there’s some kind of fee involved. Some agencies use your first payment to cover their fees, while others deduct a flat amount from your monthly payment. ...

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News : Congressman looks to change student loan bankruptcy, although debt consolidation may help as well

source : debtconsolidationconnection.com
By Angela Hawke on Apr 27th, 2010

Trying to fund higher education is a challenge many people face, as are the effects of not being able to pay off student loans in the long run.
One aspect of student loans that make them even more difficult is the fact that they are difficult to get rid of through bankruptcy. New laws passed in 2005 made all types of student loans harder to erase through filing, although a congressman is looking to change that.
Tennessee Democrat Steve Cohen, along with fellow party member and Illinois Representative Danny Davis, have authored a bill that would bring bankruptcy rules for student loans back to the way they were. In doing so, privately originated student loans would be treated the same as other forms of debt.
Cohen said that people should not be discouraged from getting further education because of the fact that it could lead to financial difficulties, and that his bill helps with that. ...

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more debt consolidation news :
-Free credit score law could help consumers, while debt consolidation can lower credit card bill
-Debt consolidation may be an alternative to questionable interest-rate reduction companies

News : Consumer credit counseling may recommend extra job, and summer proves to hold some hope

source : debtconsolidationconnection.com
By Angela Hawke on Apr 24th, 2010

One piece of advice a consumer credit counseling agency may give consumers is to find additional work to make ends meet.
A way many people may be able to find an additional job is through seasonal opportunities made during the summer. A recent survey from www.SnagAJob.com shows that the prospects of people getting hired for summer work is about the same this year as last.
About 29 percent of hiring managers interviewed in the survey conducted by Ipsos Public Affairs said they would hire the same number of people for the summer of 2010 as they did in 2009. Furthermore, the number of hiring managers who said they would hire fewer workers dropped to 18 percent, compared to the 23 percent who said so last year.
"Competition will still be fierce, especially because unemployment remains high," Shawn Boyer, CEO for SnagAJob, said. ...

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Article : Eliminate Your Debt and Effectively Manage Your Credit Score

source : ezinearticles.com
By Divya Mishra

The toughest aspect about any and every debt reduction plan is not the negotiations or the regular repayment of the debts. Instead, it is the negative impact on the credit score that is most difficult to manage.

Just as you cannot live without unsecured debt, you cannot live without your credit score. In such a scenario, it is obvious that you will have to manage both these aspects simultaneously. Managing debt relief as well as your credit report is like trying to juggle three balls at once when you have just one hand.

Holding on to a single ball is only going to hurt you more. In such a scenario, you should know how to juggle the balls effectively.

Elimination of debt by requesting your creditor for a 90% discount is, at least in theory, possible. However, what about the practical aspect? Do you think any credit card issuer will be interested in helping you out after you seek a 90% discount? Obviously not.

If you can not repay anything more than 1/10 of your debt, it is obvious that you are terrible at financial management. This information will be clearly stated in your credit report and you will find your credit score coming down drastically.

That is the reason why you should manage your debt relief program in such a manner that your debts come down even as your credit score is protected. You should go in for a reduction program that leaves you with sufficient debt that can be repaid in full.

That is to say, if you go in for 50% discount, you will have to repay the balance 50%. This means that you will have to strict towards disciplined repayment plan and fulfill your obligations very quickly.

Needless to say, this will have a huge impact on your credit score. The fact that you sought a waiver of 50% of your debt will work against you. However, the fact that you repaid 50% will definitely work in your favor.

In such a scenario, choosing the right remedy which will help you balance both these aspects is a very important task. Rather than trying to do everything on your own, it makes sense to get in touch with professionals who will advise you on the right way to negotiate and proceed.

There may be instances where card issuers may be prepared to offer a 70% discount. Going in for a 50% discount will definitely impress them that you are trying to do your best. They may even not specify that you have discharged your loan. This might even help you overcome your negative hit on the credit score.

If you are one of the millions of Americans who has over $10,000 in unsecured debt, it is time you found out about the debt settlement options available to you. Due to the current economy an overwhelming amount of people are in debt, creditors are having no choice but to agree to debt settlement deals.

Consumer Credit Protection Act

The United States federal wage garnishment law, widely known as the Consumer Credit Protection Act guards employees from discharge by their employers because their wages have been garnished in any one week. It was approved by the government in 1968. The Wage and Hour Division of the United States Department of Labor includes the Employment Standards Administration, who administers the act. The informed use of credit is administered by the United States Congress and stabilizes economic acts to be enhanced with competition informed unto various financial institutions that are engaged in extension of consumer credit that would be strengthened otherwise by informed credit use.

source : http://en.wikipedia.org/wiki/Consumer_Credit_Protection_Act

Consumer Credit Act 2006

The Consumer Credit Act 2006 (c.14) is an Act of the Parliament of the United Kingdom intended to increase consumer protection when borrowing money.

Provisions

The main provisions of the Act are to extend the scope of the Consumer Credit Act 1974, to create an Ombudsman scheme, and to increase the powers of the Office of Fair Trading in relation to consumer credit. In addition, it permits borrowers to challenge in court "unfair relationships between creditors and debtors".

Consumer Credit Act 1974

The 2006 Act brings two further types of agreement under the scope of the 1974 Act:

* Consumer agreements above £25,000, to reflect growing levels of consumer borrowing and debt;
* In section 1, to include small, one-man businesses and partnerships of up to three people.

Ombudsman scheme

The 2006 Act gives consumers the option of using the Financial Ombudsman Service if they are unhappy with their lender's dispute resolution service, whether the lender consents or not. Complaints may also be raised against other types of credit related companies, such as debt-collection agencies.

Office of Fair Trading

The 2006 Act empowers the Office of Fair Trading (OFT) to investigate applicants for consumer credit licences, to impose conditions on licences, and to impose civil penalties of up to £50,000 on companies which fail to comply with its conditions, appeals from which lie to the Consumer Credit Appeals Tribunal and thence, with leave, to the Court of Appeal.
source : http://en.wikipedia.org/wiki/Consumer_Credit_Act_2006