Debt Consolidation Services/Credit Counseling

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People can often face difficulties in paying bills due to job losses, personal or family illnesses or overspending their incomes. They can take steps to deal with their debts on their own, seek information on budgeting and money management in their communities or contact a consumer credit agency for help in managing their finances.

STEPS CONSUMERS CAN TAKE ON THEIR OWN TO HANDLE DEBT

The following is summarized from “Coping with Debt” posted on The Federal Trade Commission (FTC) website (www.consumer.ftc.gov/articles/0150-coping-debt)

The FTC recommends the following steps to help people in debt to help themselves:

CONSUMER CREDIT COUNSELING AGENCIES

Consumer credit counseling agencies offer budget planning, debt management, credit counseling, credit history assistance and debt consolidation services. They can negotiate with creditors on behalf of clients to establish payment plans. Credit card and other consumer debts are consolidated into one monthly payment with the agency’s service fee included in the payment. As part of the repayment plan, clients may need to agree that they will not apply for credit or use any additional credit while they are participating in the payment plan program.

-Money Management International (www.moneymanagement.org/)

CHOOSING A CONSUMER CREDIT COUNSELING AGENCY

For more information visit the Federal Trade Commission article on Choosing a Credit Counselor: https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor

AVOIDING CREDIT REPAIR SCAMS

There are many questionable businesses that offer “credit repair”. They promise to “fix” credit reports for fees of hundreds or thousands of dollars. Consumers should know that they can access information to their credit reports at no charge by contacting the three credit bureaus. (For details, see the e-Library paper: Credit Bureaus/Credit Reports).

Consumer Financial Protection Bureau’s webpage on Credit Reports and Scores: General Overview: https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/

TO FIND PROVIDERS IN CONNECTICUT’S COMMUNITY RESOURCES DATABASE:
Search by service names:

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SOURCES: Attorney General, State of Connecticut Office of the website; Better Business Bureau website; Federal Trade Commission website
PREPARED BY: 211/pt
CONTENT LAST MODIFIED: June2017