Bail Yourself Out Of Debt
The first step to handle your debt issue is contacting your creditors and tries to negotiate with them for a special payment term that is more comfortable to you. But your creditors may not agree with your proposal or your creditors proposed payment term still out of your financial capability, then you might want to consult the local chapter of the nonprofit Consumer Credit Counseling Service (CCCS). There are about 600 of CCCS offices in the United States, and their purpose is to help people get out of debt and avoid bankruptcy and collections. To find out the counseling center nearest you, call 800-388-2227. The national CCCS will send you an information packet explaining their services. It also will include a form in which you explain your financial situation to them, which you should fill out and return. They will then refer you to the counseling center nearest you.
The CCCS is supported financially by creditors and they offer their services to the public for free or for a small charge. Generally, under the guidance of CCS, one of the first actions that you need to react is cut up most or all of your credit cards in front of your credit counselor. After that, your counselor get to understand your debt issues and at where you stand financial at this moment. Then, he will help you to work out a realistic budget and debt repayment plan based on your financial situation. After that, CCCS will present the plan to your creditors. The plan may not be accepted by your creditors at the first time, negotiation between both parties will be able to reach an agreement point between you and your creditors. Your credit counselor will keep your creditors up to date on your progress.
Other than CCCS, there are other alternatives of debt relief agencies you can go for. Most credit counseling agencies are private and not part of CCCS system, the vast majority of creditors do not report the fact that you have joined their programs with the dreaded CCCS marking, and therefore you credit report is not damaged.
Besides all the legitimate credit counseling agencies, there are many credit-counseling scams around that try to cheat your money without proving any help. Beware such scam that claim to accomplish any of the following things:
- Remove incorrect information from your credit file for a fee. You can do it yourself with ease and at no fee.
- Remove negative but correct information from you file. Legally, negative information stays on your file for 7 years and 10 years for the case of bankruptcy.
- Get outstanding debt and judgments removed from your history. You should consider negotiating with your creditors to pay your debts if you will remove negative information from your report. You should not consider paying someone to do this for you for a fee.
- Get you a major credit card and charge you at a high price. You can always find yourself from banks that offer secured credit cards and you can apply it for rebuild your credit. You no need to pay for some one for that easy service.
- You must be in format about your right under the Fair Credit Reporting Acts.
- They must accurately represent what they can and cannot accomplish.
- They cannot collect money until all of their promises are met.
- They must provide a written contract.
- They must let you cancel the contract within three days of signing it.
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