Consumer Credit Counseling Facts
Unlike Debt settlement, consumer credit counseling does not reduce your credit card debt or other personal debt. Most consumer
credit counseling
firm's claim non-profit status and pretend to be independent. But in fact, these non-profits are funded and supported by the very people you owe money to: the credit card companies. This is why consumer credit counseling companies do not negotiate your debts down: They merely try to come up with a plan to make sure you keep paying your credit card bills every single month. They want to force consumers to pay as much money as possible to the creditors.
Sure, they may help lower your interest rate a few points or eliminate a late payment or two, but the credit card companies are happy to do this when they know you are going to keep making payments that can be negotiated to a fraction with our debt relief programs.
Additionally, since you are repaying 100% of your debt balance plus interest charges (even after they are reduced by consumer credit counseling), you could be in a consumer credit counseling program for 5 -7 years!
CCC companies were established back in the early 80’s when credit card companies started to notice that many people were having problems making their minimum payments and were starting to default on their debt. At that point there was very little a consumer could do to get financial relief (except for filing bankruptcy) so the credit card companies helped establish and fund
CCC organizations in order to recover their money from people struggling to make ends meet. Acting as separate organizations from the creditors, they were able to put on a friendly face and claim they were established to help the consumer.
Since then, many types of CCC organizations have sprung up. Besides the nonprofit or not-for-profit Consumer Credit Counseling companies there are CCC companies that go by the name of “Such and Such Consolidation Company” because of the bad reputation of some consumer credit counseling companies. This can be a little misleading because these companies do not make consolidation loans. Consolidation, in this case, refers
to the act of “consolidating” your many payments into the one payment you pay to their company—just like any other CCC company. |
