Credit Counseling, or “How You Can Help the Bank While Hurting Yourself”

If you’ve fallen behind in your credit card payments, you have probably heard from your bank, and the representative may have suggested you look into a credit counseling program. The kind bank rep may even have offered to supply a list of credit counseling companies to serve you. But it’s likely the rep didn’t share how much credit counseling companies benefit the bank.

Most credit counseling operations are independent 501(c)3 companies, but exactly how “independent” they are is open to question, since so much of their business comes from referrals from banks like yours. The credit counseling company makes its money by selling you a debt management plan, or DMP. If you enter the program, you make one monthly payment to the credit counselor, who then disburses payments to your creditors. Of course, part of that payment is the fee for the DMP, so you’re essentially paying someone to pay your bills. But what do you get for that fee?

If you’re struggling with debt, you should make a manageable plan to free yourself as quickly as possible. For many consumers, bankruptcy is the answer. At DebtStoppers, our Atlanta attorneys provide knowledgeable assistance, explaining all the pros and cons of a bankruptcy filing, so you can be confident you’re making the best decision. For a free consultation, call DebtStoppers today at 678-673-2142 or contact our office online.

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