Multiple Credit Cards in Various States of Delinquency
Is delinquency the only time a consumer should seek financial counseling? Find out what makes someone a perfect candidate for debt management.
[On-screen text] Multiple credit cards in various states of delinquency
The scenario that you’re describing with multiple credit cards in various states of delinquency actually makes you more of a perfect candidate for a debt management than somebody who is delinquent on everything or current on everything.
It’s a challenge for any individual consumer to juggle multiple accounts in various states of delinquency. That’s exactly why debt management was created to keep you from falling behind on your current accounts that bring past due accounts current.
Basically to manage whatever money you have left over at the end of the month, allocate it in a way that gets you out of debt with all of your creditors. Not just the ones that are calling, harassing you and collecting. And not just the ones you’re current on.
We want to try to get you out of complete debt from everyone you owe money to.
Ask the Expert: Counseling for Debt Collections
President Gary Herman helps you understand how credit counseling may be able to help with debts that have been moved to a charge-off status – even if those debts have already been sold to a third-party collector.
Debts in collections absolutely can be included on a debt management program. If it’s with the original creditor, even if it’s not with the original creditor, in a lot of cases we’re able to get the original creditor to accept the payments back again. Any card that’s closed and you’re still carrying a balance – any payments that you make directly to the creditor will be applied 100% to the balance. The only thing that may vary by account is whether there’s still late fees or interest being applied. Most of the benefits from a debt management program come before accounts get charged off – basically before an account gets closed is when we can have the biggest effect on saving you money and helping you get out of debt sooner. Once an account’s closed, it’s charged off – the bank has already written it off, but you still owe them the money, it still shows up on your credit report, and you’re still obligated to make payments. If it’s sold to a collection agency and now someone else owns it, we can still attempt to help you with them, although it’s not a credit card company and it may be a collection agency that we don’t have a relationship with, it’s included in our service for us to reach out to them and try to work out a payment plan for our clients. The major benefits of the program really come when you’re working with the credit card companies because they have an interest in seeing you rehabilitated, educated, and they want you back as a customer.
BONUS QUESTION: Credit counseling agencies, in general, do not help with removing things that are accurate from a credit report. And, in fact, if you did owe the money and you were behind on it, and even if you make an agreement to pay it, the credit card companies are obligated to report – not why – but if something happened.
Talk to a certified credit counselor today to weigh your debt relief options.