Question by Sung C: Trying to get back on financial track. In what ways will credit counseling help me? Also, any recommendations?
I am trying to get back on track financially. I know credit counseling will give me lower interest rate on my cards, but how far will they negotiate on my behalf? I have heard they can even negotiate to lower the actual balance on the accounts. Is that true? Are there any good ones someone can recommend? Any help would be appreciated. Thank you!
Best answer:
Answer by Mary L
You really need to be careful about those “credit repair” and “debt reduction” businesses! Getting involved with them is almost as bad as bankruptcy for your credit rating! There have even been problems with some of them getting a debtor to sign a contract — the debtor pays the credit repair company — and the company then makes very little effort on behalf of the debtor, and keeps most of the money the debtor pays to the company. The debts themselves are not reduced or discharged by the company payment at all, in which case the credit card folks, etc., simply turn it all over to collection or go for wage garnishment. (And since those credit card companies, etc., holding the debt are not parties to any agreement you make with a “credit repair” place, they will win in court.)
I suggest that you meet with your banker and/or CPA for advice! They have nothing to sell you, will not damage your credit rating, and may have some really excellent advice. There is no easy way out if you want to protect your credit, but you can do it and maintain your credit, your dignity, your independence, your reputation, and most of your lifestyle.
Best of luck!
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