You can use credit counseling to help ease the financial burden you may be suffering under. If you are having trouble paying your bills on time or if you are facing bankruptcy, you can use a credit counseling agency to educate yourself about your situation and the rights you have to protect yourself and your assets. In addition, your consumer credit counseling agency can work with your creditors to bring collection activity to a halt. This can give you valuable time and headspace to work out a budget that will allow you to pay off your debts. There are three common ways bankruptcy credit counseling can help ease the burden of your debts:

1. Stop Illegal Collection Tactics

Your credit counselor can help you to understand your rights under federal and state law, particularly as they pertain to debt collection. You have a right to dispute incorrect or inaccurate items on your credit report. In addition, state law can limit credit collection activity after a certain number of years have passed since the original debt was incurred. If they are calling you at work even after you’ve asked them not to, threatening to put you in jail, or stating they will take your home if you don’t pay up, a counselor can help put an end to these illegal tactics. The Federal Trade Commission regulates debt collection tactics, and if your creditors are harassing or abusing you, your counselor can help you file a report with the FTC.

2. Cease Collection Efforts

In addition to ceasing illegal collection efforts, credit counseling debt relief can help end collection activity altogether. If your counselor is able to work out payment plans with all of your creditors, they may be satisfied with the arrangement and stop collection activity. Of course, this means that you have to keep up your end of the bargain and make your payment to your agency as scheduled every month. If you renege on even one payment, your agency and your creditors could consider the contract null and void, which means collection activity may resume.

3. Negotiate Debt Settlements

Finally, when your agency works with your creditors, it may be able to negotiate a settlement for your debts. If you have so much debt that you can’t see the light at the end of the tunnel, your creditor may agree to have you pay off a portion of the debt, and then consider the matter settled. This can help you pay off debts quickly without having to declare bankruptcy. Your counselor can make sure that the creditor sticks to his end of the bargain, as long as you stick with yours and pay off the settlement amount.

Similar Posts:

Share