Although many credit counseling companies are legislated non-profits, most receive their income by charging debtors an upfront enrollment fee plus a percentage fee which is paid by the credit issuers (Credit Card Companies and Department Stores) based on the amount of payments that the non-profit can recover. If you temporarily fall out of a repayment plan, they generally charge a new enrollment fee or reactivation fee.

Some debt counseling firms actually have you pay a monthly consolidated payment which they withhold for an extended term to gain a bargaining advantage with creditors. This tactic can further damage your credit by adding additional late or non-payment records to your credit file.

A large number of these firms have no incentive to deal with the secured portion of your debts such as first and second mortgages, car, boats, motorcycles or motor homes, since there is no compensation available to them as these creditors are secured by the title of the underlying assets.

Since the secured portion of your debt is of minimal interest at best, most of their energy is focused on leveraging your ability to pay unsecured items like charge accounts and credit cards, often at the expense of more important secured items like your home or your car. In calculating your ability to make payments, often important everyday expense items are ignored in favor of capturing a larger portion of your income for credit card repayments. 

At Moneywatch, we are NOT in the Credit Counseling or Debt Collection business. Instead we are your paid advocates. We work to explore the full nature of your financial situation and help bring to light a number of possible solutions and outcomes that put you, not the creditors in control.

Act Now, don’t sign up for a plan that favors your creditors needs over the welfare of your family. Call Moneywatch now for a No Obligation consultation.

Call  401-941-2020