Debt Consolidation

Debt Consolidation vs. Debt Collection

The ABC’s of Debt Collection

The debt collection process can be a nerve-racking experience for many debtors. By the time a debt collection service is brought into the situation, the nerves of the debtor are frayed due to mounting bills and legal notices. This is wholly understandable that being in this situation is intimidating.

Debt collection just like any other business requires profits in order to stay in business. This is economics 101.

There are many tools available to debt collection companies that they can be deployed to achieve results, some innocuous and subtle and others are more aggressive.

A favored tactic currently being used by some companies in the industry is filing lawsuits against debtors.

This tactic has been proven effective in bringing boosting profits. In a relatively short period time from 2009-2012 income from legal collections rose from $582 million to over $1 billion in revenue.

Is Debt Collection Ethical?

This practice is perfectly legal and has proven results that are undeniable, but is it right? This is a question that we must ask ourselves.

Is this akin to kicking someone when they are down? Is there a better option than going through the debt collection process?

Debtors in the debt collection process are already in a tough spot. Throwing legal ligation at them seems counter productive to the stated goal of debt collection. Which is to collect past due payments quickly.

Making things more costly and acrimonious between parties does nothing but build more barriers to resolving the issue.

Escaping the Vicious Debt Cycle

There is a better way to getting out of the vicious cycle of debt. This process is called debt consolidation. This option has many advantages over going through the debt collection process. Debt consolidation allows you to combine all of your unsecured debt into one monthly payment.

This allows you to focus on making just one payment to us. We handle paying the creditors. This also reflects better on your credit report. It shows that you are trying to be responsible and pay down your debt.

People often think that bankruptcy or debt collection will give them a clean slate. Both avenues have long lasting affects on your long-term ability to find a job, buy or rent a home or buy a car. You will be penalized with higher interest rates or outright denial of credit.

With the stress of dealing with multiple creditors of the table, you can focus on financial and spiritual growth.  We measure our effectiveness through service, spiritual growth and Integrity.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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    Christian Credit Counselors

    Credit Counseling – Tips to Working with your Counselor

    A Beneficial Financial Relationship

    If you’ve approached a credit counselor or a debt counselor to help you get your finances in order, you’ve already taken the first step towards improving your life.  Now, it’s just a matter of making sure that the counselor has all the information needed to give you the help you need. So we urge you to keep the following tips in mind, while you work with your counselor.

    Be Financially Honest

    Some people may try to downplay their financial woes when they come in to talk to their counselors.  Remember that we’re not here to judge you.  We’re just here to help you.  So you should be completely honest with your counselor.  Tell them about all the debts that you have.  Go into all the pertinent details, even if they might seem unimportant.  Bring in as much paperwork as you can so that we can get a better idea about your needs.

    Be Financially Organized

    Of course, this is easier said than done.  Often, people who are in debt feel as if there’s a mountain of paperwork for them to deal with.  Collection agencies keep sending reminders month after month.  You may have gotten so fed up looking at these bills that you may not even be opening them anymore.  Now, it’s time to sit down, gather everything together and divide it into various piles, one for each place that you owe money to.  Your counselor will appreciate any effort you make in this direction as this will make the job easier for us too.

    Communicate Financial Goals

    Maybe you’re hoping to get out of debt in two years.  Or maybe you think that two years aren’t possible and you’re hoping for ten.  Whatever your expectations might be, it’s best to communicate them to your counselor.  We may or may not be able to meet all these expectations.  It all depends on the extent of your debt.  However, we’ll be sure to give you the next best option and you can decide where you want to go from there.

    Practice Faith over Your Finances

    At Christian Credit Counseling, we believe that faith, when accompanied by a solid practical outlook, can solve all your debt and credit problems.  Just remember that God helps those who help themselves.  And no matter how dreary your outlook might be at present, God has a plan for you to help you make things better.

    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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      Debt Consolidation

      Debt Counseling – Six Common Causes of Debt

      Understanding Your Debt

      The first step to recovering from debt is to identify that an issue exists and investigate how the issue came about so you can avoid it in the future. If you are in debt you want to work on paying off your debts but you also should try to gain an understanding to prevent returning to the same place in the future.  This is where debt counseling is beneficial. Let’s review some common causes of debt.

      Income Lower than Expenses

      This can be caused by a variety of factors including a reduction in income but maintaining the same lifestyle or an increase in expenses without an increase in income. If your income decreases it is important to create a budget to make sure your spending is not higher than your new income. Appropriate items need to be cut or minimized. If one expense increases, such as an increase in prescription costs, it is important to evaluate other areas of your budget to determine where decreases can be made to keep yourself from going into debt.

      Improper Money Management

      If you do not have a monthly budget it can be difficult to determine how much money you have available to spend. Track how much money you earn and spend for an entire month to see where your money is going and then create a budget accordingly. Also investigate if you have unnecessary expenses that can be cut.

      Divorce

      Divorce causes a strain on finances because now two households must be maintained with the same amount of money that was originally supporting one household. In addition the divorce process typically requires the payment of attorneys. A downsize in lifestyle (such as smaller home, less expensive car, etc) may be required after a divorce to prevent accumulation of debt.

      Medical Expenses

      If your health insurance policy has lapsed or you suddenly need an expensive medical treatment it can be easy to wind up in debt. It may not be possible to avoid medical expenses as health has to be a priority. Many hospitals are willing to set up a reasonable payment plan so it is worth checking into before you miss payment or put the expense on a credit card which you will not be able to pay off quickly.

      Gambling

      Many people think they will win big when they gamble which will get them out of debt. Instead they wind up going into to debt as they keep attempting to win. The truth is it is unlikely you will win big. It is rare and gambling can become an addiction which requires help to overcome. If you think you have a gambling issue get help.

      Not Enough Savings

      Unexpected expenses are bound to occur. The furnace breaks and needs to be repaired or replaced or the car breaks down and requires an expensive repair. These items are necessary and you will have to come up with the money needed. It is best to have some savings for these items. In addition savings can provide a cushion if you suddenly face medical expenses, job-loss or divorce.

      If you have found yourself in debt and are working to get out of debt it is worthwhile to also scrutinize why you ended up in debt. Gaining an understanding of how the debt occured will help you develop a plan to avoid being consumed by debt again in the future.  For help getting out of debt and learning how to avoid debt in the future contact us at Christian Credit Counselors.

      Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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        Debt Consolidation

        Debt Consolidation – Understanding how it can Help

        Avoiding Financial Struggles

        Anyone who has been through a collections process knows that it is a very emotionally shaking experience. Calls at all hours of the day, demands being made that you simply can’t afford to live-up to, and even court orders and garnished wages.

        There are some answers to avoiding that hassle, but one stands out as a way to avoid having to declare bankruptcy, and do the Christian thing by paying back what you owe. That answer is debt consolidation. But what exactly is it?

        Pay Creditors Back Without Breaking the Bank

        Essentially, debt consolidation is taking out one large loan to pay off all the smaller loans that people pick-up in their lives. This allows for you to clean the slate, without leaving the creditors in a bind and without the money that they’re owed.

        It also simplifies the financial aspect of the debt, bringing the entirety of the bill under one roof. Instead of writing multiple checks to multiple different financial organizations, it involves writing one check to one place, making.

        Will it Hurt my Credit?

        The great thing about debt consolidation from a trusted group is that debt consolidation is treated just like any other loan. It’s impact on your credit score is in direct relation to how you handle the loan itself. By showing effort to repay the loan, your credit score can increase. Failing to pay it back will have you seeing your score go down.

        Christians Helping Christians

        Debt consolidation is one of several services offered by us at Christian Credit Counseling. We are a not-for-profit group, meaning our actions are not driven by us making a profit, but rather by helping you get through this challenging situation. If you are in need of our services, contact us and we’ll help you through this struggle and get you on the road to debt recovery.

        Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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          Credit Counseling

          Credit Counseling – Five Important Facts

          Avoiding Financial Crisis

          According to an article by CNN, more than 25 million, or about 1/3 of all households, are living paycheck-to-paycheck. Many consumers are just one disaster away from a financial crisis. As prices continue to increase, and raises are few and far between, many Americans have been relying heavily on their credit cards. Your credit card debt can play a pivotal role in your financial well-being and future. If you are struggling to meet your financial obligations each month, then you may wish to consider credit counseling.

          Top 5 Credit Counseling Facts

          Smaller Payments

          By enrolling in a credit counseling, your debt will be paid off in 3-5 years. Instead of making large payments to each creditor, you will make one smaller payment to the counseling agency. Payments are smaller because counselors work with your creditors to help you get lower interest rates on your cards and will work with the creditors to stop over limit and late fees, allowing you to payoff your debt faster.

          Non-Delinquency

          Your accounts do not have to be delinquent to enroll in counseling. However, the cards will be closed and you will no longer be able to use them.

          Debt Management Plan

          Counseling will stop creditor harassment. Once you are enrolled with a counseling agency, a debt management plan (DMP) will be submitted to any creditors, medical accounts, or collection accounts you have. Once terms are negotiated, collectors will no longer contact you.

          Your Credit Score

          Credit counseling does not hurt your credit, however, there may be a notation on your credit bureau that you are using a counseling agency. Many creditors look at your debt to ratio income when making the decision on whether to provide financing or not. By reducing your debt it will help your credit score.

          Anyone who is in a financial crisis can request counseling assistance. Regardless of income level, anyone who has a significant debt to income ratio can apply for counseling assistance to help improve their situation.

          Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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            Debt Consolidation

            Debt Consolidation is Not a Simple Solution

            The Cause vs. Symptoms of Financial Struggles

            People sometimes think that debt consolidation is a simple solution that will solve the worries of accumulated debt, and put you on the right track toward living within your means. The popular wisdom, for instance, is that if you already have a mortgage, that an equity loan will serve nicely to put your worries behind you.

            While there is some validity in this belief, it is important to place importance upon the cause of the problem, not the symptomatic relief. If your debt is a result of medical problems, or a family catastrophe, or a natural disaster loss, then the act of debt consolidation may help you to get back on track.

            Evaluating your Financial Lifestyle

            But if you find yourself in a constant state of not having enough funds to support your lifestyle, then you may need to fix your lifestyle before deciding what is going to help you. An inappropriate solution may be counter-productive.

            For instance, getting a refinance on a home that includes paying off personal credit card debt may compromise your ability to deduct mortgage interest on your home on Schedule A at tax time. Deductibility of mortgage interest depends on several factors, including the fair market value of your home at the time of the refinance. And even if your loan balances are well within the limits of the fair market value, you are only allowed $100K of equity debt in that loan balance for the mortgage interest to be fully deductible.

            Examining Your Money Priorities

            It’s important to examine your priorities in your lifestyle before deciding on a solution. If you hide your unresolved issues in further debt, then the problem will only get worse, not better.

            The quality of your commitment to conquer debt is the most important factor, however. This includes an honest look at why the debt is there.

            Common reasons for debt include the loss of a job, a divorce, medical expenses, bad management of a one-time windfall, or simple ignorance about financial reality. Each of these situations, or each combination of them, will require a strategy beyond the initial solution.

            Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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              credit card debt
              Christian Credit Counselors

              Credit Counseling and Your Financial Struggles

              The American Mountain of Debt

              Have you noticed that in our American culture, it seems impossible to get through life without a mountain of debt? Maybe you haven’t even considered it, because it is so thoroughly weaved into the fabric of our society.

              All you have to do is turn on your television, open the mailbox, or visit a store, to find that there are financing and credit card offers everywhere. You can finance your furniture, your car, your appliances, your home, your vacation, and even your children’s Christmas gifts. If you are like the average person, you probably get more credit card offers in your mailbox than actual mail!

              The Average American Household’s Debt

              According to CNN Money, an average American household with a credit card carries almost $16,000 of credit card debt. When you account for the fact that the US Census reports that the median income is $51,000, the gravity of this situation becomes evident. This means that it is typical for a consumer to rack up over thirty percent of their annual income, in debt. The lack of education about debt and credit can lead to stressful situations including foreclosure, bankruptcy, repossession, bad credit, and creditor harassment.

              The Principles of Christian Credit Counselors

              Christian Credit Counselors is a non-profit credit counseling agency, and we believe in spending wisely and keeping a budget to ensure sensible spending. God’s will for your life is not that you should be swimming in debt, but living within your means, and even with enough breathing room to be generous toward others. But in this day and age, that just doesn’t come as common sense.

              We’re not in the same culture as our our great grandparents were. If your great grandfather wanted something, he would have saved up for it. In our microwave culture of, “I need it now,” we would simply put it on credit. Christian Credit Counselors can provide assistance with learning the ways of old which appear to be long gone, but with the number of families in financial crises rising daily, it seems inevitable that we will learn again how to manage money successfully.

              Be on the frontier of financial freedom by signing up for a class with us, scheduling an appointment with a certified credit counselor, or participating in a tele-class or webinar. We can help you learn to create a budget, make wise credit decisions, get out of debt, and ultimately build wealth to experience the peace of financial freedom. As Proverbs says, “the borrower is slave to the lender,” but you need not be that slave!

              If you are struggling financially, get help today. The sooner you do, the sooner your chains will be loosed. Don’t believe the lie that life-long debt is inescapable or that you are too far gone for help. We will be your lifeline, and with a little help from us, your financial goals are attainable. We have assisted countless families with seemingly insurmountable debt, and seen them achieve victory. To view the stories of families like yours who have been successful, please visit our testimonials page.

              Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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                Christian Credit Counselors, Credit Counseling, Debit & Your Credit Score, Debt, Debt Consolidation, Uncategorized

                Signs of a Good Credit Counselor – Service to Servanthood

                IDing a Good Credit Counselor

                If you’re reading this, you’re probably concerned about your financial situation.  You want to take control of your life, get out of debt and develop better spending habits in the future.  But you can’t always do all of this by yourself.  You may need a credit counselor’s help.  If you’re thinking about getting a credit counselor, here are a few things to keep in mind.

                Services they Provide

                Different credit counselors specialize in different things.  Some might be more interested in improving your credit score while others will focus on eliminating debt.  Some might want to make sure you walk away with a better idea of your spending priorities.  So you need to think about what exactly it is you need to do most and then go with the credit counselor who gives you that service.

                Number crunching

                If your main aim is to get out of debt, you’ll need to make sure that you get the lowest possible interest rate and the lowest possible monthly payment.  Of course, you don’t want to end up paying off your debt for the rest of your life either.  So you should also consider how long it’s going to take you in the plan set up for you by your credit counselor.  At Christian Credit Counseling, we try to give you a low interest rate and a low monthly payment while still allowing you to pay off your debt fast.

                Their Approachability

                A lot of people feel a little ashamed about the fact that they’ve gotten into debt.  In addition to this, you don’t need someone else judging you.  If you feel uncomfortable with the counselor working with you, then don’t choose them.  Make sure that they’re approachable.  You should be able to speak to them about whatever is on your mind.

                Who Recommended Them

                If the credit counselor has been recommended to you by a friend, they’re probably trustworthy.  You might want to sit down with your friend and get the details of their experience just to make sure that your situations are similar.  You can also read through online reviews which will give you a lot of information about the counselor, what they aim for and how they interact with people.

                Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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                  Christian Credit Counselors, Credit, Credit Cards, Credit Counseling, Debit & Your Credit Score, Debt, Debt Consolidation, Uncategorized

                  Debt Counseling – Three Sign You Need it

                  Debt Counseling Candidates

                  Sometimes, it’s pretty obvious that someone needs debt counseling.  After all, you know when you’re in debt.  You know when you’ve spent money on credit without paying it off.  You know when you’ve taken out loans.  It all sounds simple enough.

                  But, for some people, financial matters are anything but simple.  They keep trying to keep track of their money but find themselves floundering all the time.  If you suspect that your financial problems are beyond your control, then ask yourself the following questions to figure out if you need debt counseling:

                  If you have Loan Payments

                  Everyone’s taken out loans at one point or the other.  You may have done so to pay for your studies or for medical expenses.  If you don’t remember how much money you took out as a loan or how much of it is still remaining to be paid, then you’re probably in need of debt counseling.

                  Sometimes, people deliberately ignore the notices that come to their door because they don’t want to see the sum they owe going further and further up due to lack of payment.  If this describes you, then you probably need debt counseling.

                  If you have Credit Card Debt

                  If you can’t even remember how many credit cards you have and what the interest rates are on each of them, then chances are you owe quite a bit of money and need debt counseling.  Most of us have a few credit cards but it’s important to keep checking how much you owe on a monthly basis and paying that sum off little by little.  If you are in the habit of only making  your minimum payments, you’re probably running  a huge tab which consists mostly of the interest on your purchases.

                  If you can’t Afford your Basic Necessities

                  Everyone needs food, clothing and shelter in order to live.  You don’t absolutely need to have additional comforts or luxuries but these three items are non-negotiable.  If you find that you’re struggling to make ends meet where food, clothing and shelter are concerned, then you probably need debt counseling.

                  You shouldn’t have to pull out a credit card to pay for groceries.  And if your rent or mortgage payments are going through later and later in the month (or not going through at all), then there’s no shame in contacting us us at Christian Credit Counseling to help you with your problems.

                  Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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                    Christian Credit Counseling
                    Bankruptcy, Christian Credit Counselors, Credit Counseling, Debit & Your Credit Score, Debt, Debt Consolidation, Uncategorized

                    Debt Consolidation vs Bankruptcy

                    The Debt Consolidation Facts

                    Are you facing the possibility of bankruptcy?  Take time to explore all of your alternatives before you go through with a bankruptcy.  Debt consolidation is a valid option that will not negatively impact your future as bankruptcy will.

                    Bankruptcy

                    Bankruptcy has a variety of negative implications.  For those enduring financial hardship and looking to escape the seemingly never ending bills you may be surprised to find out the costs associated with bankruptcy.  Filing for bankruptcy will cost $300 and attorney fees could be in the thousands.  Pre and post counseling will also cost you money.  If it doesn’t sound helpful for someone overwhelmed by financial issues, it isn’t.  Bankruptcy is time consuming and complex.

                    In addition it has long lasting future implications.  You will struggle to obtain future loans for cars and a home.  It may be difficult to rent.  Bankruptcy remains on your credit report for 10 years.  Future employment may also be impacted.  Bankruptcy should only be a last resort after all other options have been exhausted.

                    Debt Consolidation

                    Enrolling in the Christian Credit Counselors Debt Management Program (DMP) will allow you to pay off your debts over time.  All of your unsecured debt (credit cards, medical bills, and collection accounts) will be consolidated into one monthly payment and Christian Credit Counselors will send the money to your creditors.  Often the interest rates are reduced and the majority of creditors stop their fees (such as late and past due fees).  Credit harassment will stop.

                    Your credit score will not be negatively impacted by debt consolidation.  During the time you are enrolled in the DMP your credit report may show that you are managed by a credit counseling agency but your score will not be impacted.  In addition when you have completed the DMP the report will no longer show that comment which means you will be much more likely to obtain a mortgage or auto loan than those that experienced bankruptcy.  Future employers will view you as responsible for paying back the money you borrowed.

                    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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