Are you experiencing financial difficulties related to COVID-19?
MARMORA, New Jersey, August 24, 2020 / PRNewswire / – The financial difficulties associated with COVID-19 are still very serious. Without government help, consumers are likely to increasingly rely on credit cards to manage household expenses. Added to this is the fear that it may become more difficult for consumers to pay their bills when the deferrals offered by credit card issuers end.
Now more than ever, consumers need to be aware of their options when it comes to seeking help to pay off their unsecured credit card debt.
Let an FCAA member credit counseling agency be your first stop for unbiased, confidential debt service advice. Mission-based education, credit counseling agencies provide unbiased information based on the unique set of a consumer’s financial situation. There is no “one shoe for all” solution for consumers in financial difficulty.
After a thorough review of your budget, a certified credit counselor can discuss the different options available for debt repayment. Here are some of those options:
- Self Help – With just a little discipline, you may be able to stay on track and pay off your bad credit cards on your own.
- Debt Management Plan (DMP) – If you qualify, a certified credit counselor can enroll you in a DMP. Your current credit card debt payments will be consolidated into one monthly payment to the credit counseling agency, which will then make the monthly payments to your creditors. DMPs are designed to last no longer than five years. In exchange for working with a credit counseling agency, the consumer receives lower interest rates and waives late fees from creditors. Because the payments are made monthly, the accounts will not go into default, there will be no appeals from the collectors, there will be no tax consequences (as could happen with the settlement of the tax bill). debt) and the damage to the credit rating will likely be less severe than one that had been enrolled in a debt settlement plan.
- Debt Settlement – While this is a viable option for some, debt settlement plans present some pitfalls. Consumers are advised to stop making their monthly payments and save for the settlement offer, which means accounts go into default and collection phone calls begin. Late fees and interest charges start to add up. There is no guarantee that offers to settle made to creditors will be accepted. Any debt forgiveness is taxable. And finally, since no payment is made and the consumer is in default, their credit rating can be severely affected during this process.
- Bankruptcy – If you are applying for Chapter 7 or Chapter 13 protection, you’d better speak to a bankruptcy lawyer first.
- Debt Consolidation Loans – This is simply an exchange of one form of debt for another, although hopefully at a lower interest rate.
So why not pick up the phone and call an FCAA member agency to discuss your options?
For assistance from an FCAA agency, call 800-450-1794 or visit www.fcaa.org .
About the FCAA
The FCAA is a 501 (c) 3 non-profit association whose members are 501 (c) 3 non-profit credit counseling agencies. By providing financial education, budget advice, housing advice, student loan advice, bankruptcy credit counseling, and debt management plans, Certified Members of the FCAA and their certified credit counselors can offer a holistic approach to helping consumers in financial difficulty.
866-278-1567 – Office
SOURCE Financial Advisory Association of America