It’s easy to get into debt. It’s much harder to get out of it.
Fortunately, there are credit counseling agencies that can help you get your finances in order. They can help you figure out a budget and stick to it while managing your debt and avoiding future financial pitfalls.
However, not all credit counseling agencies are the same. Some offer free or low-cost services while others charge high fees or might not be trustworthy. The following tips will help you choose the right credit counseling agency.
Look for Agencies with a Good Reputation
Most reputable credit counseling agencies are nonprofits that offer free or low-cost services. However, the fact that an agency is a nonprofit does not guarantee that it is affordable or that it has a good reputation. Here are some tips for selecting a credit agency you can trust:
- Ask family members and friends if they can recommend an agency. It’s best to pick one that has been around for several years and has a well-established reputation.
- Use credit agencies or credit counseling services referred by credit unions, banks, universities or military bases.
- Choose a credit agency that’s been approved by the Federal Government.
You can also check out state and local consumer agencies to find out if a credit agency has complaints.
Compare Services and Costs
Once you have a list of agencies you can trust, the next step is to take a closer look at the services and costs they offer so that you can choose the one that best serves your needs. Be careful with credit agencies that charge high fees for services that you can get for free somewhere else.
Some of the most common services offered by credit agencies include:
- Professional, person-to-person assistance with managing your money and debt.
- Help putting together a family budget and sticking to it.
- Free workshops and educational material.
Ask Lots of Questions
Before finally choosing a credit agency, it’s worth writing down a list of questions you might have so that you can avoid surprises such as hidden fees or limited services. Here are some questions to help you pick the right credit agency.
- Are there different fees for different services? Some agencies might charge for initial consultations or a monthly fee. Be careful with agencies that pay their employees more depending on the services you sign up for.
- Will you be signing a contract before getting counseling? If so, be sure to read the contract before signing it.
- Does the agency have the right certifications to provide credit counseling? It’s best to use agencies that have been certified by independent organizations.
There’s no such thing as a quick way out of debt, but there are realistic steps you can take to get debt under control.
There is no such thing as a quick and easy way to get out of debt, but there are realistic steps you can take to get debt under control.
Develop a budget: Assess how much money you make and how much you spend. Writing down all your expenses is an easy way to get a realistic picture of where your money goes. Your goal should be to make sure you can pay for the essentials, like food and shelter, with enough left over to tackle your bills.
Contact your creditors: If you’re having trouble making payments, you may be able to work out a modified payment plan with your creditors. Let them know right away if you’re struggling before the accounts get turned over to debt collectors. If your accounts do get turned over to debt collectors, this video from the Federal Trade Commission can help you understand your rights.
Look into debt relief services: Credit counseling could help you set up a plan to pay off your debts. Even though many credit counseling groups are nonprofits, their services aren’t necessarily free.
Get more tips for managing your debt.
To learn about other free resources to help you no matter what your financial situation, sign up for our e-mail list or visit our page.
Asked by Anonymous
How do I find forgiveness for my student loan. I will never be able to pay it off. I am on disability now.
It’s possible to have your student loan debt discharged (canceled) or reduced, but only under certain specific circumstances:
- You die or become totally and permanently disabled.
- Your school closed before you could complete your program.
- For FFEL℠ and Direct Stafford Loans only: Your school owes your lender a refund, forged your signature on a promissory note, or certified your loan even though you didn’t have the ability to benefit from the coursework.
- You work in certain designated public school service professions (including teaching in a low-income school).
- You file for bankruptcy. (This cancellation is rare and occurs only if a bankruptcy court rules that repayment would cause undue hardship.)
If you are unable to work and earn money because of an injury or illness that is expected to continue indefinitely or result in death, you may apply for a Total and Permanent Disability (TPD) discharge of your FFEL Loans, Federal Perkins Loans, Federal Direct Loans, or TEACH Grant service obligation. Disabilitydischarge.com has more information on qualifying and to apply for a TPD discharge.
Visit the Department of Education for more information on student loan cancellation.
If you are not sure what kind of loan you have, you can get information on your loan from the National Student Loan Data System.
If you would like to file a complaint about your student loans, you can do so through the Consumer Financial Protection Bureau.
This week is National Consumer Protection Week. Today we are answering your consumer questions. You can join us for a live social media chat at 2 p.m. EST. Learn more about the chat and how to submit your questions.
Asked by Anonymous
What is the United States national debt