Christian Debt Counseling Company
A Christian debt counseling company can analyze a household's assets and expenditures and assist an individual in developing a financial plan which can help him or her to wisely use the resources which God has given. For a Christian, it makes sense to utilize the advice of counselors who develop financial principles from the Bible. He that getteth wisdom loveth his own soul: he that keepeth understanding shall find good. (Proverbs 19:8). These principles are not rooted in the latest passing financial fad, but have stood the test of time and helped many people learn to successfully manage their finances. Many of these biblical admonitions are familiar; there are few earth-shaking revelations among them. Yet a debt counseling company can provide the accountability which allows a consumer to put these principles into action.
Some words of caution: all organizations which have the name 'Christian' as part of their name are not necessarily run by Christian individuals. Try to get a referral for a reputable company from a pastor or other trustworthy acquaintance. Also, just because an organization is secular does not mean that it could not have useful information or articles within its resources. Use discernment in accepting financial advice from any source, and be especially careful in choosing a debt counseling company which will be the recipient of personal and financial information. The last thing a person strugging with debt needs is to become the victim of identity theft! Instead, find out what steps the company will take to secure any personal information entrusted to it.
Aside from having a Biblical basis, there are other considerations which should go into choosing a debt counseling company. Know which services will be offered, and at what cost. A reputable company will be able to explain these details well before any contract is signed or fees are paid. There are debt counseling companies which do not charge fees for their counsel. Instead, they provide these services as a ministry to others. A company might charge fees if arrangements must be made to implement a relationship with a debt management company as part of an individual's financial plan. This is acceptable, because they are providing the service of disbursing payment to various creditors, and need to be paid for their efforts. However, if a debt counseling company insists on collecting fees and security deposits from a client before fully discussing his or her specific situation, it would be best to seek help from another source.
Other considerations in choosing a debt counseling company include finding out the qualifications and training of its counselors. A reputable company will generally have its advisors accredited by an organization outside of the company. An organization which offers financial services or counseling should be able to give the customer a written contract which clearly spells out the obligations of each party. Any costs related to these services should also be listed. Check the company's history through the Better Business Bureau or the Attorney General of the state, to ensure that there are no complaints lodged against it for failing to provide services.
Some services which a legitimate debt counseling company will provide are the following. First, an analysis of the current financial situation will be done. This may involve looking at bank statements, bills, and the details of other outstanding debts. A budget will be drawn up to reflect the individual's unique situation. Counselors may also work with creditors to reduce fees or interest rates, or to extend the amount of time for repayment of the debt so that payments can be made more manageable. As an individual gains control over his or her spending, and learns ways to reduce the costs of necessities, more money can be set aside both for paying down debts and for establishing a savings account. The latter will help provide relief in emergencies so that a person does not immediately have to run to high interest credit cards. Most financial advisors suggest that an amount equal to several months worth of salary be kept aside as an emergency fund in case of injury or job loss. Rather than becoming intimidated by the size of this task, start with establishing a budget. This will make a great deal of difference in one's financial situation and will provide encouragement to continue to take small steps towards larger financial goals.
Beware of a debt counseling company which makes outrageous claims about the amount of money which may be saved, or the way they will improve the customer's credit rating. Remember that most of the time, a person can accomplish this by himself, for free, by consistently paying off the debt. The value of a company's help in these areas is mainly in providing information and accountability during this process. The aim of these services is to eventually enable the client to manage his or her finances in a responsible way. The best companies clearly state that this is the individual's own responsibility, and will take the time to educate the customer regarding financial principles. Otherwise the client will soon find him or herself right back in the same debt-ridden place again. Some companies even provide continuing online articles, financial calculators and other resources, and check up on a client occasionally to see if goals are continuing to be met. After all the trouble a person must take to become debt-free, it is surely worth a bit of extra effort to be sure that things remain that way.
Christian Debt Counseling CorporationA debt counseling corporation is a business that helps consumers that have gotten into so much debt from credit cards and other money owed that the consumer is looking for a way out without having to declare bankruptcy. These businesses act as the middlemen between card holder and credit card companies to arrange lower interest rates and a consolidation of all credit card payments so that the card holders can begin to make headway on owed money repayment. For example, a debt counseling corporation can arrange for a person who had been paying eight hundred dollars a month in credit card payments to have a consolidated payment of five hundred dollars a month. Then the consumer is asked to put that extra money on the cards' principles, paying one off at a time. As more money gets freed up, the consumer is to continue adding more and more of the extra money to the remaining principle and usually in about five years, credit card balances can be eliminated.
One of the problems with this approach is in the plan's weakest link: the consumer. Those who have used credit for so long and have lived above their means enjoying many luxuries in life that were not truly affordable but for credit, cannot get off the adrenaline rush of credit spending. When a debt counseling corporation develops a plan for a client, the client must agree not to use credit cards while on the plan. Using credit can end all agreements with creditors. In addition, a client cannot open a new credit card while on the program. This is the reason over seventy percent of those using these services fail to stay with the program.
A debt counseling corporation will put a client on a balance owed management plan, also known as a DMP. This is a strict, no second chances agreement with creditors. There can be no late payments with this agreement. A late payment can and almost certainly kills the deal with all creditors and puts the client in an even bigger mess. The debt counseling business knows exactly how much the client makes and how much money he has left over after all bills are paid. The plans are specifically tailored so that there is enough money left over after the consolidation of bills to make the one credit payment each month. Creditors are not of a mind to excuse people given a second chance to have a third opportunity.
One of the real problems with many of the debt counseling corporation plans is not the plan but the company. A number of these companies charge fees for their services that are higher than needed. There is very little if no oversight by the federal government on this kind of business. Sadly, the truth of the matter is that many of the debt counseling corporation names also have the tag as being non-profit. This moniker can be a sign to unwary customers that the business is doing financial counseling out of the goodness of its heart. Nothing could be further from the truth. Many of the so called non profits have also taken advantage of their customers by charging higher than necessary fees.
Sad to say, but some of these corporations that were originally started to help educate unwise consumers of credit do no educating at all. There is no counseling and no effort to get at the root of the misuse of credit. Even worse is the fact that some of these services have even pocketed most or all of a client's monthly payments and the client was unaware until the creditors came after them! A monthly statement with the credit card balances ought to be part of the service the counseling organization offers. So while some people actually use these programs successfully, most bail out before the program is over. For the minority who begin the programs and finish them, the result is living without debt at least for a while. Many of the successful clients enter back into the abuse of credit later on, succumbing to the desire to live above their ability to pay.
There is one final warning about using a debt counseling corporation. When the decision is made to use such a service, it affects a person's credit history for a number of years. Using this kind of relief program is a very close relative of chapter thirteen bankruptcy. This is a legal move to restructure debt so that creditors are no longer calling the debtor. Chapter seven bankruptcy is basically walking away from all money owed except taxes and some government loans coupled with losing most all assets. Chapter thirteen shows that a person wants to pay all monies owed but needs help with the schedule of repayment. Using a counseling company to restructure unsecured mony owed is much the same.
The truth about all of this debt counseling/management stuff is that every company is in business to make money off a Christian's bad financial decision making. If the company is truly a debt counseling corporation it will only educate the client on how to get out of the financial hole the old fashioned way. If a debt relief business consolidates all the loans down into one payment that goes to them first and then to each of the creditors each month, that business is making a profit off someone's misery. What's the old fashion way of getting out of debt? Not many people want to mess with it because it's painful and time consuming. It also means making a wholesale change in lifestyle and that certainly is not on the plate of most Americans. Making a fundamental change like that can only come through the power of God. "Therefore if any man be in Christ he is a new creature; old things are passed away; behold all things are become new." (II Corinthians 5:17)