CREDIT » CREDIT REPAIR & REPORTS

You may be on the fast track to debt hell and are looking for a way out, which is why credit counseling is now on your mind. This is definitely not a bad route to take if you think that you have little-to-no control over your ability to manage your debt. Many people who file for bankruptcy are required to seek counseling before they can get approved for a Chapter 7 or Chapter 13. On the other hand, taking the steps to get on track on your own is even better.

If you don't already know what credit counseling is, lets start by understanding what it is...

What is Credit Counseling?:

Credit counseling is a process of offering education to consumers about ways to avoid incurring debt that can't be repaid. This type of counseling involves negotiating with creditors to help establish a type of debt management plan for the consumer. This means that the consumer would be able to repay his or her debt by working outa repayment plan with the creditor.

Now that you understand what credit counseling is, lets see where you can get the help...

Where Should You Go ForHelp?:

The U.S. Trustee Program offers a list of credit counseling agencies approved pursuant to 11 U.S.C. 111. By visiting the U.S. Department of Justice website, you can find a list of approved agencies, searchable by state. To begin searching, you simply choose your state from a scroll down list then click "Go." A new window will pop up giving you your district information, as well as an extensive list of credit counseling agencies to choose from. Since all of the agencies are already approved, your only job is to choose the one closest to you.

It's never a bad idea to take on credit counseling if you feel that you're debt has gotten out of control. So if you think this is the route you would like to take, visit the U.S. Department of Justice website to find an approved credit counseling agency near you.

Though you may be thousands of dollars in debt, are on the verge of losing your car, and can barely pay your bills; when someone suggests credit counseling as a way to straighten out your situation, do you say "No, not me!?" If that is you, you may be in denial. Of course, not everyone needs credit counseling services, but more peopleneed itthan are actually admitting. So how do you know if you're one of those people in denial? Take a look at this quick list...

You Know You Need Credit Counseling If You:

• Are filing for bankruptcy. If you'refiling the Chapter 7 (complete liquidation of your debt), you will need to consult a credit counselor to make sure that can't reasonably pay off your debt on your own. Ifit is ruled that you can, you may be moved to aChapter 13, which means you will utilize credit counseling to create a debt management plan with your creditors.
• Have alow credit score. If your FICO Score is lower than 620, it is very possible that you've made some errors along the way with managing your debt. Whether you've failed to pay credit card bills on time, or completely defaulted on a loan, you might consider credit counseling asa way to straighten out your debt and raise your score.
• Simply know that your debt management is out of hand. If your credit score is not low yet and you are not in danger of needing bankruptcy, yet you know that your spending is a bit irresponsible, you may seek credit counseling for guidance on how to better manage your spending. However, most people use this type of counseling to get help with paying back debt that can't manage without professional assistance.

If you don't think you need credit counseling, you're in good shape! But if you do, you may want to visit the U.S. Department ofJustice to find an approved list of credit counseling agencies in your state.

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