Having the burden of too much debt can affect your health in many ways. The signs of this stress and anxiety can make themselves seen firstly through lack of sleep. You can be kept awake night after night with the thoughts about how you will pay your bills running through your head. You can experience anything from mild to severe depression. The signs of depression range from sleeping too long or not enough, loss of appetite, lack of interest in things you used to do or just plain irritability. If you feel that severe depression is a problem seek the advice of your doctor who may be able to put you in touch with someone who can help you through the difficult times.
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Credit Counseling Businesses and Credit Counseling Resources offers the following article from The Buffalo News.  This is an important warning to stay on top of credit card payments, or reach out for help before it becomes more serious and more difficult to control.  There are legitimate credit counseling businesses and options out there to keep your from being harrassed by collectors.

When collectors call: Fight, compromise or pay up?

By Fred O. Williams

The tree is down, the cookies are a memory—the holidays are over. ’Tis the season of trying to pay the bills. But in this faltering economy, many households are falling behind, bringing the headache of debt collection calls.

Dealing with debt collectors can seem overwhelming, especially when more than one bill is late. But experts say it’s important to take charge of the situation, know your rights and face debt problems before they snowball out of your control.

"The next step is a summons," said Larry Curtis, director of counseling at the Consumer Credit Counseling Service in West Seneca.

Creditors are sending more overdue bills to court, in order to seize assets and wages, he said. Once a collection action reaches the courtroom, your options become narrow and unpleasant.

Adam Wisniewski of Niagara Falls didn’t even know that a collector was after him until he went to the bank and his ATM card wouldn’t work.

It turned out that a collection lawyer had obtained a judgment against him for a credit card debt that wasn’t even his. Wisniewski had to find a lawyer of his own to fight the case and get his bank account unfrozen.

"Now I go online and check my credit card and bank once a week, to make sure there’s nothing going on," the 33-year-old retail manager said.

Fortunately, Wisniewski’s story is an extreme example, financial counselors say. Most people slide into collections by avoiding even thinking about bills. Others try asking for an extension but run into problems—some have difficulty communicating with call center workers overseas —so they drop it, Curtis said. But instead of going away, the problem escalates.

"The creditor sends [bills] to a collection agency or right to an attorney’s office," he said. Most creditors, including banks, credit card issuers, utilities and even doctors’ offices, will turn over a bill for collection when it reaches 60 or 90 days past its due date.

Dealing with collection agencies is different than dealing with the creditor. Collectors work on a contingency basis, meaning they get a slice of whatever they’re able to collect. While that means they’re aggressive, they may also be willing to work out a deal.

"Lenders are negotiating for a lot less than they were a couple of months ago," said David Chadwick, attorney at the Legal Aid Bureau of Buffalo.

In exchange for a prompt payment, collectors are often willing to write off a big chunk of the bill. Some bills that were settled for 60 percent, for example, may now be whittled down to 50 percent, he said, knocking off half the original amount.

Of course, many debtors are too tapped out to take advantage of a settlement, or they would have paid the bill in the first place.

Consumers need to take stock of their situation, debt counselors say. If the financial hole is too deep to pay current bills, they’ll have to think about bankruptcy, which will stop collection and may wipe out many debts.

But if there’s enough income to meet regular expenses, consumers may work out a repayment plan that salvages their credit history. Paying off the entire debt, even if it takes longer, will look better on your credit report than paying a settlement for a reduced amount.

Consumer Credit Counseling Service, a nonprofit, specializes in setting up repayment plans, some of which extend three to five years, Curtis said.

Unfortunately, even people in hock are being targeted by scams. Ads that promise to magically wipe out debts are circulating, giving false hopes that debt problems will vanish. Beware of debt consolidators that take an up-front fee and fail to begin paying your debts with it right away, consumer advocates say. The state attorney general’s office recommends sticking with nonprofit credit counseling agencies that are licensed by the state Banking Department.

Important questions to ask a counselor are: What fees will be charged?How will your information be safeguarded? And will employees earn bonuses if you sign up for extra services?

While businesses have a right to collect legitimate bills, consumers also have rights in the collection process, and knowing the rules of the game will at least level the playing field.

One area woman had fallen behind on a credit card, but she arranged to pay it off in installments of $75 a month. Then the post office box where she sent her checks was closed, and her mail was returned.

"Four years go by—then, out of the blue, they sue her," said Peter Dellinger, a consumer attorney in Rochester who represented the woman. The collector said that her $873 debt had mushroomed into $7,000 because of interest charges.

Fortunately, she had saved the documents connected with her repayment plan, Dellinger said, including her canceled checks, and even the envelope that was returned to her. With that evidence in hand, she was able to convince the court that the collector was the one in the wrong, not her.

Getting everything in writing and keeping the documents is one good rule of thumb. When a collector calls, you have the right to request proof of the debt. This is a good first step, Curtis said. Even if you are familiar with the debt, getting proof from the collector ensures that the agency is authorized to collect the bill.

If the bill is unfamiliar or the amount is wrong, you have 30 days to dispute it. It’s important to do this in writing. Once the agency receives your dispute letter it must provide written verification, or stop contacting you.

Harassment is forbidden. Agencies can’t call you before 8 a. m. or after 9 p. m. unless you agree. They also shouldn’t contact you at work if you say you’re not allowed personal calls.

Collectors may call your neighbors or relatives, but only to find ways of contacting you. It is forbidden for them to reveal your debt to others. It’s also forbidden to falsely threaten you, for example by saying they’ll seize your wages or bank account, unless they have court authorization to do so.

If you think a collector has stepped over the line, you can make a complaint to the state attorney general’s office. The number for help is (800) 771-7755. More information is on the Web site at www.oag.state.ny.us . The Federal Trade Commission also oversees debt collectors, with information and contact numbers on its Web site at www.ftc.gov .

fwilliams@buffnews.com

Are you unable to make your monthly minimum payments on your credit cards?

Are you late paying any of your bills?

Have you tried to contact your creditors? Have those efforts brought no solution, or a solution that you still could not meet?

Are you being chased down by creditors and collection agencies? Avoiding phone calls, and deleting emails?

Do you have a steady, reliable income stream, but it is simply not enough to make those minimum monthly payments?

Can you reasonable restructure your debt and pay it off within about 2-5 years? If you are unable to meet that timeframe, you may be better off opting for bankruptcy.

What is Credit Counseling?

In a nutshell, credit counseling is a process through which consumers are offered education about how to deal with their debt, how to avoid accumulating additional debt and often involves negotiating with creditors to create a debt management plan. A DMP is a plan in which the consumer repays their debt on a repayment schedule. Often, DMPs include the ability to reduce payments, interest rates and fees. After the DMP is created, the creditors close the consumers’s credit accounts to cut off the consumer’s ability to continue to accumulate debt with that creditor.

How do DMPs help a consumer with overwhelming debt?

DMPs can be advantageous for the consumer struggling with debt as the credit counseling agency helps to consolidate the monthly payments of the debtor into one single payment. Typically this payment is less than the sum of each of the individual payments made each month by the consumer. In fact, many consumers find that after having tried to negotiate this on their own, it is only with a DMP that the same credit card bank will now accept this lower monthly payment.

DMPs are also helpful to the consumer as they may also achieve reduction in the interest rates they are charged by their creditors. Some consumers who are behind on credit card payments find themselves paying interest rates in the upper ranges of 20%, close to 30%! By joining a DMP, consumers can find themselves with annual percentage rates lowered to 10% or less, sometimes even eliminating the interest charges all together! This justifies the claims of many counseling agencies that their customers will be debt free in a short range of time as when the interest rates are dramatically lowered, the consumer is able to pay the debt off more quickly. Note that if you are simply looking to reduce your interest payments but you are current with your accounts, you probably should not look into a DMP as the creditors may carry that debt as "past due" in exchange for the lowered interest rate.

DMPs also help customers’ accounts that have become delinquent to a current status and help to impact their credit rating over time. This is also known as "curing" and account or "reaging" the account. The consumer making the payments dictated by the plan on a consistent basis will have these accounts reported to the credit bureaus as current. This, however, does not simply erase the past delinquencies. But with time and the continued payments with the debt management plan in place, the consumer will begin to rebuild a more positive credit history. Participation in a DMP does appear on a consumer’s credit report, and it can impact the consumer’s ability to obtain home or car loans. Some lenders will see this as a negative, as it can indicate that a consumer has not managed their debt well. On the other hand, other lenders can see it as a step in the right direction as it can also indicate that the consumer is taking care of their debt obligations and may be worth the lending risk.

Did you know that Credit Counseling is a requirement for filing for bankruptcy?

Credit counseling is now a requirement for any consumer filing for bankruptcy, as per the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. To meet this requirement, the consumer must complete a program with a nonprofit consumer counseling agency with at least one counseling session. Furthermore, they also have to complete a post-filing education credit counseling session before their debts are fully discharged.

What do I need to know about Credit Counseling Agencies and the negative statements about the industry?

Credit counseling has come under a lot of scrutiny lately with charges that consumers have paid hidden fees, excessively high fees, poor service and many other complaints. Many feel that the agencies take the sides of the creditors more often than the consumers. There are also charges that credit counseling agencies hire employees with little to no formal credit counseling training. So, you are putting your financial future in the hands of an employee who may have no more knowledge financial management than you do!

Beware of any agency that asks you to pay high upfront fees. They will claim to be "debt settlement" specialists and they tell consumers that they will negotiate their debt to "pennies on the dollar", we have all seen the ads and commercials. This is typically NOT a legitimate claim, and by the time they take your upfront fee, and the fees of thousands of others, they have enriched themselves, and preyed on consumers desperate for debt solutions.

While you may be desperate and want to hear postive, hopeful news and advice about your debt, do not fall prey to the con artists that make unrealistic promises. A legitimate credit counseling agency will tell you all of the details of how you and your credit will be impacted, even with the DMP. Make sure that they are accredited, and you can check that through the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.

Do your due diligence and you can find a reputable Credit Counseling agency that will help you understand the process realistically, charge appropriately, truly do what they say, and assist you in your Debt Management Plan. This can be a viable alternative to bankruptcy, and get your on a path of financial success and security and freedom from debt in the future.

Credit Counseling Business and Credit Counseling Resources will offer information and updates on how credit counseling may be the right fit for you, and how you can work with a reputable credit counseling agency to your advantage.   While we do not offer credit counseling services, we will do everything possible to make sure that you can make an informed decision with the information that we provide to you.  This also does not constitute legal or financial advice.  If you are in need of legal or financial advice, it is always best to take the information you have gathered to an attorney or financial advisor for their input, interpretation and possible legal representation.