Consumer Credit Counseling Considered Bankruptcy

Using Agencies That Promise to Reduce Payments or Eliminate Debt Could Cost You
 

By Pete Shrader, Mortgage Banker, Realtor
MoneyLink Mortgage, MarketLink Realty
Twin Cities, Minnesota 

 You’ve heard the radio ads. You’ve seen the commercials. They say: “…gotten into too much consumer debt? …call us now and we’ll work with your creditors to reduce your interest rate and cut your payments in half.”

Bankruptcy laws have tightened so, instead of filing bankruptcy to get out from under unmanageable debt, many people are choosing what is called Consumer Credit Counseling.

Consumer Credit Counseling (also referred to as “Credit Counseling”, “CCC”, “CCCS”, or “Debt Management Plans”) has become big business. But ‘borrowers beware!’ –  Consumer Credit Counseling is treated like a bankruptcy by many creditors.

That could mean higher interest rates next time you borrow for a car or a home. Lenders assume that those seeking counseling for mounting debt have done so as a method of debt relief – similar to the effect a Chapter 13 bankruptcy repayment plan.

Before considering Consumer Credit Counseling get all the facts. Consider the pros and cons. Understand the consequences of the decision you make.

For more information or help deciding what to do based on your unique situation email me or call my direct line at (952) 292-0285.

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Pete Shrader is a Mortgage Banker, a Realtor, a Real Estate Investor and the author of the Smart Seller Guide. This article is not meant to offer legal advice and is not an offer to lend or to lock a rate. Always consult the appropriate professional for tax or legal advice. © Pete Shrader 2007