I lately had the privilege of discussing credit card counseling with a neighborhood banker. Among the items he mentioned one of them stood out in the report. Immediately after review it became know that persons in debt are searching for credit counseling programs to seek debt relief.
The issue having said that is the long time frame related with the programs. The monthly payments remain the same as well causing the exact same concern to arise getting the strain of the monthly payments on household budgets. Many persons have even enrolled in CCCS programs paid the fees and then dropped out. This is where the trouble lies.
Ethics should certainly come into play in this scenario. When dealing with an indebted consumer quite a few credit card counseling businesses act like debt collecting sharks to gain enrollments. Pushing the consumer by pointing out the non-profit status of the enterprise to enroll in the plan. Right after this shaky enrollment procedure they deduct the 1st monthly payment that goes entirely to fees for the service.
If the next month the client fails to make a payment there is no follow up completed to see why. The cause being that the credit counseling firm is paid for and sponsored by the credit card organizations themselves. The IRS has completed much analysis into the non-profit CCCS programs but have had small achievement with fully eradicating predatory credit counselors. Additionally the credit counseling firm is paid a "fair share" in most cases in between 7-12% of the debt directly back to the credit counseling agency.
Consult with a banker or an attorney to see if credit counseling or debt settlement is ideal for your financial requirements.
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