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Can credit counseling help with creditor harassment?

When debt levels have risen to an unmanageable level, one of the most stressful aspects of financial strain involves seemingly constant harassment by credit collectors. The agencies that employ credit collectors operate under a business model that seems to be centered on a program of harassment and intimidation. While aggressively pursuing debtors who are in financial strife seems a questionable approach, it is one that many in the industry embrace. For those in Arkansas who want to put an end to creditor harassment, credit counseling and bankruptcy offer two means of attaining that goal.

Credit counseling involves working with an organization that is dedicated to assisting consumers in paying down their existing debt, and educating them on how to avoid similar debt problems in the future. Two of the best resources for credit counseling are the Financial Counseling Association of American and the National Foundation for Credit Counseling. Both of these organizations can help consumers find debt solutions at little to no cost.

One method used by credit counselors involves making a comprehensive assessment of existing debt and then working with creditors to reach mutually agreeable repayment terms. This can yield a new repayment schedule, which can stretch existing debt out over a period of three to five years, which can make the monthly payments easier to manage. Counselors and also work to eliminate existing fines and fees associated with delinquent accounts, which can give consumers the breathing space needed to move forward.

Creating and then adhering to a credit counseling plan can also stop creditor harassment. Once a repayment plan has been agreed upon, creditors and collections agents will stop calling. That said, if a consumer is unable to repay those debts within the agreed-upon framework, he or she could be placed right back into the same cycle of collections and past due balances. While each situation is unique, for some in Arkansas, personal bankruptcy offers a faster path toward financial stability.

Source: The Huffington Post, "How Credit Counseling Helps", Terry Savage, June 16, 2015

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