Credit Counseling Secrets
You should know that some credit counseling outfits are funded by major retail firms. They
will rarely recommend bankruptcy even in cases where it’s obviously your best
solution. Their business is pushing unsuspecting consumers into punishing payment plans.
Oh they will tell you that they‘re trying to help you avoid the "humiliation of
bankruptcy". They will emphasize that filing any kind of bankruptcy will destroy your
credit rating.
In extreme cases they may suggest the chapter 13 “wage earners” extended payment
plan. But just try and get them to discuss wiping out your debts through a chapter 7
filing - Forget it. These outfits are a very poor source of advice for anyone in financial
hot water. In short, don’t expect them to have your best interests at heart.
They’re just doing their master’s bidding.
Other firms are blatant rip-offs that take advantage of people in terrible ways. Some
firms will advertise that they will negotiate your bills down to a manageable level for
you. That sounds just great. They collect the info they need and call you in a few days to
tell you that they have, in effect, cut your debt in half!
Then they demand a hefty fee up front for their wonderful services. You happily pay up as
it’s only a small percentage of what they’ve saved you. Later you discover that
they didn’t do anything at all. Your debts remain just as they were before.
Or they may pay your debts late and clutter up your credit rating with fresh new negative
information. Something you certainly don’t need at this stage of the game.
If you must use a credit counseling service - stick to a non-profit one and check their
reputation with consumer groups.
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