Where to look for debt management advice
When you're drowning in a sea of debt, anything resembling a lifeboat can seem like a savior. But don't jump on board too fast or you could end up taking bad advice that sinks you even deeper. You don't need to spend much money for debt management guidance; there are several nonprofit agencies qualified to help, and they don't charge for an assessment.
Nonprofit debt management
If you need outside help managing your debt, you want the most experienced organization that charges the least amount of money. The Association of Independent Consumer Credit Counseling Agencies, or AICCCA, and the National Foundation for Credit Counseling, or NFCC, offer free assessments and have several member agencies around the country to serve you. If you can't find one close to you, seek out a nonprofit organization accredited by the Council on Accreditation.
How it works
Once you find an agency with which you feel comfortable, sit down with a counselor. He or she will evaluate your specific situation and come up with a debt management plan that works for you. Once the plan begins, collection activity should cease, and creditors may reduce certain payments and fees. The counselor also will help you cut spending and fix your budget.
The cost of using a counselor can vary greatly, but fees are usually capped at a $75 setup fee and monthly fee of $50. You can get a good estimate on your new, realistic financial outlook by using a debt consolidation calculator.
Beware of debt settlement
Companies that push debt settlement as a quick fix are often selling a bigger risk than it's worth. Debt settlement, while it seems simple, can actually unleash more collection activity. It can also seriously damage your credit.
Try qualifying for a legitimate debt management program before looking into alternative means.
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