Debt Counseling Rises as Economy Continues to Sputter & Unemployment Remains High, Debt Settlement Laws May Change (video) « Frugal Café Blog Zone

Debt Counseling Rises as Economy Continues to Sputter & Unemployment Remains High, Debt Settlement Laws May Change (video)

Posted By on June 17, 2010

This is the worst economic recession that America has suffered in more than three decades.

As a result, more and more hard-working people who have never experienced unemployment, underemployment, or income slashing are in need of debt counseling.

Whether it is some simple belt tightening on eliminating frivolous purchases and being more frugal during these challenging times, or undertaking a major overhaul on a family’s credit card debt, counseling and assistance can help.

From Consumer Affairs:

Consumer debt is approaching $2 trillion and millions of Americans are in serious financial trouble. Many are turning to debt-counseling services, a growth industry prone to all the abuses a fast-growing market generally produces, as a U.S. Senate investigation documented recently.

From HULIQ, Debt Counseling On The Rise in Slow Economy:

Debt counseling is not only financial counseling, but has also become a type of psychological therapy and a way to save lives, literally. With so many people losing their jobs, their homes to foreclosure and their livelihoods due to the poor economy, many are falling victim to the psychological pressures that come with financial difficulties and falling fast into debt.

Some of the psychological ramifications of falling into debt are depression, divorce, domestic violence, drugs/alcohol abuse and something needs to be done. There is help out there and it is called debt counseling.

Debt counseling helps to teach people how to make budgets based on whatever income they receive, so that they can buy the absolute necessities for their households and cut back drastically on the extra things that they do not truly need. When in debt, people have to realize that extra luxuries must fall beside the waist-side in order to survive. Debt counseling gives people the confidence that they can indeed make a workable budget to maintain their households and live the most comfortable lifestyle they can. Debt counseling helps to encourage people and teach them how to cope with the stress that comes along with financial difficulties.

From Sandra Block, USA Today, Drowning in credit card debt? Debt settlement can be tricky:

The ads are ubiquitous, and for consumers awash in debt, nearly impossible to ignore: Reduce your credit card bills 50%! Avoid bankruptcy! The relief is real!:

Behind the ads is a fast-growing industry that barely existed a decade ago. Debt-settlement companies claim they can significantly reduce borrowers’ debts by negotiating directly with creditors. Unlike most businesses, these companies have flourished during the economic downturn.

But a growing group of lawmakers, regulators and consumer advocates say these companies exploit desperate borrowers, often leaving them deeper in debt. The Federal Trade Commission wants to restrict fees the companies charge. Sen. Charles Schumer, D-N.Y., has introduced legislation that would bar debt-settlement companies from collecting fees until a settlement has been reached. Last month, Oregon’s attorney general reached a settlement with Credit Solutions of America, the USA’s largest debt-settlement firm, that bars the company from operating in that state for three years.

Now, the industry is fighting back.

The Consumer Credit Rights Campaign, a coalition of debt-settlement companies, says the proposals would eliminate a legitimate option for consumers who can’t afford to fully repay debts and don’t want to file for bankruptcy.

Debt-settlement companies act as a valuable intermediary between borrowers and lenders, says Don Goldberg, a Campaign spokesman. “If you take them away, you’re leaving consumers on their own.”

From Gather, Business, Debt Counseling 101: Can’t Afford Grocery Stores and Gas Stations?:

Debt counseling is a relief if you find you can’t even afford necessary visits to grocery stores and gas stations. After all, you have to eat and get places. Debt counseling gives you the tools to have enough money to handle routine business such as grocery stores, gas stations, dry cleaners and pet stores.

Debt counseling is an alternative to being broke all the time or claiming bankruptcy. Besides, current bankruptcy laws are a lot tougher. When your bills exceed your income and you feel like you’re drowning, debt counseling is a way to get your head above water. Businesses and individuals both benefit from professional debt counseling to get out of the red. Debt counselors offers tools, resources and advice to put you in the black.

Debt counselors offer assistance through meetings, email, telephone conversations and instructional videos. To benefit from debt counseling, you need to face your outstanding bills. Gather all your obligations with proof of all your current income. If you have unusual circumstances such as a job loss, illness or family death, discuss them with your debt counselor. Provide as much info as possible so the debt counselor can give you the best personalized advice.

From FOX Business, How to Know When You Have a Debt Problem:

You can’t sleep. You jump when the phone rings. For you, four of the scariest words in the English language are “Your statement is enclosed.” And it’s all because, as National Foundation for Credit Counseling spokeswoman Gail Cunningham says, “the dark cloud of debt follows you around 24/7.”

In some cases, a little financial belt tightening or a few accelerated credit card payments are enough to get that cloud to dissipate. But sometimes a debt crisis becomes too overwhelming to handle on your own. How do you know when you need help to get it under control?

Click here to read valuable information on debt guidelines.

A few YouTube videos I thought had some value. Before launching into any debt counseling, be sure to fully research any company with whom you are thinking of working with — many are excellent, others are not. An ounce of prevention…

Debt Management Credit Counseling Corp


Credit Counseling Dealing with Debt Collectors Head On


Debt Management Tips : How to Get Out of Credit Card Debt


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About the author

I'm a conservative frugalist. My priorities: Watchdogging the government, making sure our tax dollars are spent wisely, living within our budgets (at home and in Washington, DC), and adhering to our Constitution and the conservative principles upon which it was developed by our founding fathers. Also, loving God, my family, and my country. Be wise, be frugal. God bless America!      


11 Responses to “Debt Counseling Rises as Economy Continues to Sputter & Unemployment Remains High, Debt Settlement Laws May Change (video)”

  1. The major thing that debt settlement and consulting companies over look is asset protection and wage garnishment protection. Wage garnishment is the result of loosing a debt collection lawsuit. Do not be a victim of wage and property garnishment. Get adequately protected. Just read this Article it explains what debt settlement/consulting companies don’t want you to know Also, be careful in choosing the right company. Make sure they don’t just take your monthly payments into and escrow account and then forget about everything that else matters. There are companies available to help you settle your debts for pennies on the dollar all with out long drawn out monthly creditor payback plans.