Hi! My name is Tim; I am here to talk to you a little about debt assistance companies. Credit counseling; there are two major layers if you will of credit counseling. There is the counseling itself and there is also settlement services. The two major differences: credit counseling is really helping you set up a budget for yourself, helping you serve that budget and there are many companies that do that. They'll counsel with you, they'll sit with you, and help you make a budget and what's affordable, they'll help you spread the payments out, they'll talk to some perhaps credit card companies to lower your monthly interest rate, lower your payment, make a plan. There are generally plans that last between 30 and 60 months and it's very important to use a reputable company.
Do not use one that approaches you. These companies generally don't approach people; they rely on word of mouth and referrals from banks, referrals from financial planners, and such. Don't answer one that are solicit, there are a lot of scams out there. They generally do charge a fee anywhere from $100 initiation fee to $50 a month or a percentage of what they are managing with you.
What they do again is they help you form a budget, that's affordable for you. You pay into that budget. They make the payments for you generally and it's only for your unsecured debt; It's not for your home mortgage, it's not for your car loan, they only manage debt that might be unsecured, meaning your credit card debt, student loan debt, things like that.
The word of mouth; if you really want to get a good credit counseling company, ask your local bank, ask a local financial planner, an attorney, someone that's trustworthy to you.
That's a little bit about debt management, about counseling. Debt settlement is if you have a credit card and you really want to -- you can't afford the balance, you can't afford the payment and you want to settle with that credit card company. There are settlement services that do that. They will try to get you 50%, $0.50 on the dollar off, they'll try to get you 50% off, it does and always work that way.
Again, those referrals should come from a source you trust, not from a solicit. Be careful with the debt restructure because you are settling for less than what you owe that credit card company or that creditor and that can be a dangerous tool on your credit report and will get to your credit reports in a different venue. So, thank you, that's a little about credit counseling and I hope that's been helpful.
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