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Non Profit Credit Counseling

Updated on June 3, 2015

Let's face it, sometimes before you know it, you can find yourself over your head in debt and can feel completely overwhelmed. It can feel like you are carrying an incredible burden, and looking up at an impossible amount of bills to pay. Please do not give up, and open your mind to opportunities that may be out there waiting for you. There are not for profit companies out there, who are ready and willing to work with you and with the credit card companies and other creditors to help you get out of debt. This article will provide some honest free advice and provide helpful links for individuals seeking free credit counseling.

Today there are many companies out there that can help you with your credit card debt. Once you decide that it is time to do something about that gorilla on your back, you will need to contact a credit counseling company and set up an account. The counselor is going to do two things for you. The first thing is going to be to educate you on how debt happens and how you can better manage your money in the future to avoid this from happening again. It doesn't really do any good to help you get out of debt, but not help you understand how to not get into bad debt in the first place. The second thing the counselor assigned to your case will do is to represent you to the creditors. Your counselor will represent you to your credit card companies and banks and will negotiate lower payments, and lower interest rates in most cases. This is called putting yourself on a debt management plan so that you can work your way out of debt.

One important thing to point out is that non profit credit counseling is not filing for bankruptcy. A bankruptcy can stay on your credit report for seven years or more, this debt management plan is a way for you to repay your debts. Bankruptcy will discharge your debts, but at a significant cost to you for years. Help with credit card debt can be done two ways and both paths are very different. The aforementioned are forms of non profit credit counseling, the other method is debt consolidation credit counseling. For some, debt consolidation is the better way to go, and the choice is up to you. The difference between credit counseling and debt consolidation, is that debt consolidation consists of taking out a large loan to pay back many creditors, essentially consolidating your debt into one loan. I want to take a look at both paths and weigh out the pros and cons. 

If you've ever asked yourself the question of how do i get out of debt, then please keep reading.

Debt Consolidation Credit Counseling

There are some stark contrasts between getting on a non profit debt management plan and consolidating debt. One difference is that it generally will leave your accounts open and in good standing. Most of the time the consolidation loan is at a lower interest rate, although still higher than normal, than the debt a person is carrying. This lowers their overall monthly payment and allows them to pay only one loan, or company back, instead of having to write checks to multiple creditors. Usually, these loans are higher in interest and are generally harder to get approved for because of the risky nature of the borrower. Individuals who typically apply for these loans are already in debt and heading down that road, this can make banks a little eerie of lending the money. Creating debt to pay off other debt. Another downside is that most financial institutions will require some type of collateral in order to lend money for debt consolidation. Usually a house is used as the collateral, and while this lowers the risk for the lender it also will lower the interest rate for the borrower. If your debt consolidation loan involves collateral, and it is on your house, then part of the terms will be to allow foreclosure if you default on the loan. So please be very careful to read the fine print.

Non Profit Debt Management

Non Profit Credit Counseling will certainly be a useful tool in getting out of debt more quickly than trying to just pay things off on your own. You will have a counselor that will go to bat for you with the credit card companies and lenders and save you thousands of dollars in interest. What generally happens is a debt management plan is set up by the counselor and your creditors. This results, usually, in the accounts being closed at the different companies. This is to prevent further pile up of debt. Because of the lower interest rates, more of your payments go to the principle of your debt, which in turn helps you eliminate the debt faster. Another added benefit that a credit counselor can assist is in "curing" your delinquent accounts. This is part of the negotiation process, and can make your past due accounts current status.

Below you will find more resourceful links to non profit credit card counseling companies and other Hubpages resources. Good luck, and don't give up.

Credit Repair Services

In addition to non profit credit counseling, there are services out there that will help you clean up your credit report. If you are seeking out non profit credit counseling, you might have some blemishes on your credit that are hurting your credit score. One of the best things you can do to help yourself get better loans for things like cars and houses is repair your credit. At least it is a good place to start. I have found two really great services that can help repair your credit report. They both have a monthly fee, but the savings in interest on loans over the long run more than pays for the membership fee. If you are interested the two services I found are Sky Blue Credit Repair and Ovation Credit Services.

Suze Orman On Handling Your Credit Card Debt

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    • profile image

      Full Circle 

      7 years ago

      Its a good post but the part they forgot to mention is that Non profit and Independent credit counselling services do the same thing. Just because they are Non profit does not make them better, in fact many Non profits will only deal with companies that they have agreements with for a "Fair Share Donation" If you have payday loans or creditors that don't pay the Fair share many will not include them on the program, additionally, many non-profits ask for a MANDATORY Monthly membership fee. They say that this gives them access to educational material and free services that many independent credit counselling services provide for free. It is important to do your background checks and ONLY deal with licences and bonded companies. Never deal with companies that don't hold their own Trust account or ask you to open an account on their behalf. Make sure they have a good rating with BBB.

    • Aaron_smith profile image

      Aaron_smith 

      8 years ago

      Pretty good article on non profit credit counseling. It will really help those who really need credit counseling and will help people understand the advantages of credit counseling. I have also shared my knowledge on consumer credit counseling at https://hubpages.com/money/Why-and-When-to-opt-for... . Hope it helps one and all.

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