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The Virgin Consumer and Debt Management Debt Management Agreements: The Pitfalls
Credit counseling is not a very well-regulated industry today. In the past, credit counseling was operated more like a social service rather than as a business designed to make a profit.
The industry was known by the general term CCCS (Consumer Credit Counseling Service) and operated under the general guidelines of the NFCC (National Foundation for Credit Counseling).
The lay of the credit counseling landscape has changed. As more and more consumers find themselves deeper and deeper in unsecured debt (think credit cards), more and more for profit credit counseling services have sprung up. Some of these services are very good and very fair, but be aware that not all of them are.
Some credit counseling services are good, others are bad, and then there are those that are just evil.
1. The debt management service that you choose should be a member of the BBB (Better Business Bureau). You can check with the BBB to see if the company has a good record and if there have been any complaints filed by others. Membership in the NFCC (National Foundation for Credit Counseling) or AICCA (Association of Independent Consumer Credit Counseling Agencies) is also acceptable.
2. If the debt management service promises you that it will take 20 minutes or less to solve all the financial problems, you need to run as fast as you can. They are referring to THEIR financial problems and not yours. It takes time and effort by a debt management service to help with your financial problems and get you the best deals possible.
3. Be certain that the debt management company can help with all of your unsecured debt and don't just deal with a few companies. Half a fix is often worse than no fix at all.
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| American Version of Debt Management Debt Management Experts
People who work as debt management experts go to school for that sort of thing. Many spend four years or more getting college degrees that identify them as experts in the money and debt management fields. And they are experts, there's no doubt about it.
The best of the debt management experts and debt management teachers, however, are those who have learned to manage their personal finances and their personal debts, and then passed that knowledge along to their children.
Those who actually do it are the experts, and they are the ones that we need to learn from to avoid having to visit with a well-educated debt management expert because we have gotten ourselves into financial hot water.
As I look around at expert debt managers (those who successfully manage their own finances) I find that they have many things in common. They don't all do things exactly the same way, of course, but the structure in which they manage their finances is basically the same.
1. They save first. Those people who know how to save very rarely get into financial trouble. Sure, they can. Life can throw some pretty hard curve balls....the loss of a job or a major illness. But unless their financial trouble is caused by an outside force they will not get themselves in debt up to their eyeballs.
2. They live within their means. They do not base their spending upon what their friends have. The neighbors might buy a new car, but that will have no bearing upon whether they do or not.
3. They all have budgets. Not only do they have budgets, but they live within the constraints of that budget. They do not make impulse buys. If asked, they could tell you how much is spent each month on food, shelter, clothing, utilities, and transportation. |
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| Budgeting for Debt Management Debt Management: The Controls
Managing debt is very much like driving a car. When you drive a car, you must know where you are going, keep your hands on the steering wheel, your eyes on the road ahead, look behind you, and watch your speed. That is the way that you control a car, and controlling debt is done in the very same way.
Know where you are going: You and your spouse or significant other need to sit down and define your financial goals so that everybody knows what the destination is. With specific goals in mind, the route to achieving them will be easier to define.
Keep your hands on the steering wheel: The steering wheel of debt management is the family budget. A clear allotment of funds will keep your financial life on the road and going in the right direction.
Keep your eyes on the road ahead: To avoid accidents, you need to be prepared to stop or take evasive action when driving a car. The same is true of debt management. You need to save first and spend second.
Look behind you: We always learn more from the mistakes we have made in the past, and we can learn from the things that we did right as well. Remember where you have been so that you can better see where you are going. Gauging progress inspires us all to do better.
Watch your speed: You don't want to try to go too fast when achieving your financial goals. You need to live well today, as well. But you don't want to poke along in the slow lane, either. Set a speed and stay in control of that speed. Save on a regular basis so that your goals may be achieved...but enjoy the trip, too. |
Related Topics: Debt Management Agreements-The Pitfalls,
Debt Management by Negotiation, Free Programs for Debt Management
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