In it’s simplest form, credit counselling is the process where you meet with a credit counselor and they give you advice on managing your money. They will help you deal with credit card debt, and they will explain how to improve your credit score on your credit report.

In addition, if you are planning to file for personal bankruptcy in the United States, they will conduct the mandatory credit counseling before filing bankruptcy, and the post bankruptcy filing credit counseling session. In Canada, the credit counsellor will conduct the credit counselling during the bankruptcy process.

Finally, a credit counselor will actually negotiate with your creditors on your behalf through a Debt Management Program where you make one payment each month to deal with your debts.

For more information, consult a local credit counselor.

If you required more help, they may recommend a Debt Management Program where you make one payment each month to deal with your debts.

In a debt management plan the credit counsellor negotiates the settlement on your behalf, and your debts are repaid over a period of time. In other words, a debt management plan is one of the services provided by a credit counselor on your behalf.

Fewer and Fewer banks will be as accepting as they were in order to re finance existing loans or mortgages.

Rising interest rates will affect consumer borrowing costs at a rate 2 times as much as the increase in Prime Rate.

There will be a distinct increase in the number of Credit Card offers and options coming through the mail and internet.

By shear numbers, insolvency will increase dramatically and the time to react to this will decrease because of denial and fright.

The fix is simple… Look at all of your outgoing expenses and ask your self ” Does this honestly feel right?”  most people have a little voice inside that is more insightful and honest then they will accept. There are many, many services, strategies and professionals out there that can assist you to counter strike agains financial distress. We too can help so please ask!… OK?  Please..

Example: A $100.00 bill on a regular basis could be paid at $110.00 (only 10%) for 7 months the actual balance owed each month declines to next to nothing keep going til you get a month ahead.

For a run down of the math please contact us.

Making all of your payments on time is very important, because late payments can have a negative effect on your credit score.

If you don’t want an automatic payment, it is also possible to pay your bills on-line, on the date due. For example, if your hydro bill is due on the 20th of this month, set up your on-line banking to pay the bill on the 20th of this month. Your payment is made on time, but the money stays in your account until the exact due date, so you may earn some extra interest.

Be careful with this, however, because if you’re not monitoring your account regularly, you could find yourself becoming overdrawn and hit with multiple overdraft fees from your bank.

• Before you go to the mall, make a list of who you are buying for, and what you will spend and stick to it. Impulse buying is the number one cause of excessive spending at Christmas.
• Put some effort into your gifts. By thinking ahead, you may find that homemade gifts, pictures, or crafts are the best gifts, and often the least expensive.
• Leave your credit cards at home. People who use credit cards spend more than people who pay by cash or debit card, because credit cards don’t feel like real money.
• Don’t forget to include in your budget the extras, like gift wrap, shipping, and cards. As a bonus tip, stock up on all of these items after the holidays to save money next year.
• Shop early. Waiting until the last minute makes it very hard to plan ahead.
• Shop on the internet. Many web sites allow you to comparison shop, and they are a great source of ideas.
• Consider a gift pool with your relatives. Instead of buying for everyone, put everyone’s name into a hat, and just buy one gift for the person you get.

The holidays are supposed to be fun, so plan early, and make the holiday season enjoyable for all.

Many people may not realize, however, that since September 1, 2006 residents of certain areas of Chicago, Illinois are required to have credit counseling before they are allowed to purchase a house. The law, called the Illinois Predatory Lending Database, is intended to curb predatory lending by educating borrowers before they enter into a mortgage agreement.

Before buying a home, credit counseling must be obtained from federal Department of Housing and Urban Development-certified counselors for people looking to buy homes in 10 Chicago ZIP codes who have low credit scores or whose income meets other criteria. The law only applies in certain zip codes that the state says have a high proportion of “predatory loans” and higher than average foreclosure rates.

Since most would agree that credit education is sorely lacking in North America, it could be argued that everyone should be forced to attend credit counseling sessions. However, a lawsuit is now underway, arguing that this law unfairly targets minorities. You can read more about it in today’s edition of the Chicago Tribune.

Some of their key findings:

– Through the first 11 months of the new law, NFCC members delivered 563,494 bankruptcy counseling and education sessions and issued 630,422 certificates.

– Consumers filing for bankruptcy were “upside-down” financially, with average unsecured debt being $11,599 greater than average annual income and the unsecured debt to income ratio has deteriorated since the April NFCC report.

– Mortgage delinquency was more prevalent for consumers filing for bankruptcy than for those receiving non-bankruptcy counseling.

– Phone and Internet counseling continue to be the predominant choice for services.

The full press release can be read here. Clearly the cost of providing the mandatory credit counseling is more expensive than originally anticipated, so further changes to the rules are possible. Stay tuned to this credit counseling Blog for updates as they become available.

In debt consolidation, you get a loan to repay all of your debts. You now have one monthly payment.

f you enter into a Debt Management Plan, your credit counselor works out payment arrangements with your creditors, and you make one monthly payment to your credit counselor, who then distributes the money to your creditors.

In both cases you make one monthly payment to deal with your debts. There are however two significant differences.

First, you must qualify for a debt consolidation loan based on your income and your credit. You may be required to provide outside security, such as a car or a house, to get the loan. The debt consolidator then lends you the money to repay your debts. With credit counseling there is no credit qualification; it is up to the creditors to accept or reject your plan. You do not need to provide any outside security.

The other significant difference is that you will be paying interest on your debt consolidation loan at the going rate, which may be very high if you have less than perfect credit. With credit counseling, you are paying a reduced interest rate. In many cases there is no interest if you make your payments as agreed.

If you have more debt than you can handle, investigate both debt consolidation loans and credit counseling, and then decide which option is best for you.