When to Ask for Help

(The Following content is taken from Chapter 4 of The Free Credit Repair Kit )

            There are times when it’s a good idea to use a consumer credit counseling service.  For example, if you feel like you’re one step away from bankruptcy, this might be an option that will keep you from having to file.

            If you’re buried in over the limit fees and high interest, you may want to consider a service that can help to reduce those costs so you can pay your debt down faster.  Chances are that the blemishes on your credit report from late payments and poor credit ratios will be no better than the mark of consumer credit counseling.

            One way to determine how comfortable you feel about a counseling service is to just make an informational appointment.  You can go over your debt and discuss payment options.  During that initial meeting, you don’t have any obligation to sign up for the service.

            While people often run from the idea of filing for bankruptcy, consumer credit isn’t always a better choice.  Sure, you’ll actually pay all of your debt which can help you to fulfill any moral obligations you may have.  However, you won’t be offered the same type of protection that you receive from a bankruptcy.

            For example, if you miss only one payment a creditor may cancel your debt management plan and go right back to overcharging you. 

            You also lose your bargaining power with your creditors.  When your accounts are suspended in the process of a debt management plan you don’t have the power of being a consumer. On your own you can use your negotiating power without putting a dark mark on your credit report.