Financial advisor for debt managment advice?

[PhillyGirl23]

I'm 24 and a year into the working world. I have a great job with a steady salary, but I have bills up to my ears. Besides extremely high student loan payments, I have extreme credit card debt. This was mainly accumulated while paying for a private college education on my own. I hate my current situation but I am plagued by high balances and high interest rates on credit cards. All I really want is some advice on what I should do. I've read everything I can read about debt managment, but I don't think I can do this alone and I'm wary of debt managment agencies. Does anyone have any advice on who I can talk to? A financial advisor/planner? If so, where do I find a reputable one in Philadelphia? Preferably one that won't charge a lot for services?

[caddymac]

Sometimes the best help you can get is help for yourself. For-hire debt management companies will take money from you that you don't really have to basically do the things you can do for yourself for free.

Do you have any friends to offer any advice? How about family members that have been down the same road? Remember, always take advice with a grain of salt, but sometimes different people can generate a spark.

Have you tried calling the credit card companies to see if they can lower your interest rates?

[PhillyGirl23]

Sometimes the best help you can get is help for yourself. For-hire debt management companies will take money from you that you don't really have to basically do the things you can do for yourself for free.

Do you have any friends to offer any advice? How about family members that have been down the same road? Remember, always take advice with a grain of salt, but sometimes different people can generate a spark.

Have you tried calling the credit card companies to see if they can lower your interest rates?

I have called all my credit card companies and some did lower my rates slightly. What it comes down to is I need to make more aggressive payments to lower my balances so they will lower my rates even more. My parents cannot help me out and none of my family and friends have been able to help. That is why I was trying to look for some sort of a professional that knew what they were talking about. I am wearing of debt managment places because I have heard plenty of stories that they don't pay your creditors on time. Plus, I want to handle this situation myself instead of handing all my money to someone else.

[winneythepooh7]

I have become really agressive about paying off debt this year, as well as saving "something" each pay period into my savings accounts/IRA. I have gotten really anal, sat down, planned out month by month what all my bills are and any left over goes straight back into the debts/savings. (Paying bills online helps because you can log-in a week or two before they are due to get the amount). I also bring my lunch to work and live by the "$20.00 a week from the ATM" rule. When it's gone, it's gone.

What worked for me as well, is to divide my debt by the number of months/years I want to pay it off, and that gave me a more realistic # of what I should be paying towards my debt.

Can you consolidate your student loans?

Also, I am focusing on other debts before my student loans right now. For example, my credit card and car payment. I feel that student loans are going to be there for a much longer time, and is also a fixed payment that can't be held against me.

If I pay off the car completely and pay off the credit card completely, I will be able to put that money towards my student loan.

There are also awesome financial blogs out there if you just do a little search. They offer great advice on paying off debts and ways to save money.

[AshleyJordan]

I would urge you to look for a reputable nonprofit credit counseling agency that can help you for little or no cost. . . I'm not sure what there is in Philly but a keyword search on idealist.org may be a good start. From what I understand (only b/c my cuz is a financial advisor, not through any personal experience) their services are more for folks with a fair amount of $ to invest-- whether for retirement, real estate, the stock market, etc.-- and less so for people like us, just starting out. I could be wrong, but that's my understanding, and it might be best to try a nonprofit. Also, I've worked in nonprofit for 6 years, and if you find an org that you think might be able to help you, feel free to PM me. I can quickly and easily do a little basic research to make sure they're fairly legit.;)

[AshleyJordan]

Agree with your general advice, just quibbling with a detail. My finanical planner actually (who I've been working with since I was in HS) helped me get my financial act together and begin saving for the future better than I would have done on my own. It's not just for rich people.


That's awesome, and I'm glad I was misinformed! It's probably b/c of where my cousin works and the clients he has that I got that impression. He did, however, agree to take me on as a client, maybe as his token "pedestrian".

[wordsmith]

Question...my first inclination is to trust that nonprofit credit and debt counseling services are on the up and up, but have also read that this isn't necessarily the case, that it's not uncommon for disreputable agencies to apply for and obtain 501(c)3 status as a means of appearing more trustworthy, because people are more inclined to trust a nonprofit. I've read that they're not necessarily anymore legit. Anybody have any insight on this? It seems to be an issue that you get different answers no matter who you ask/where you go to look/research. So confusing.

[AshleyJordan]

Question...my first inclination is to trust that nonprofit credit and debt counseling services are on the up and up, but have also read that this isn't necessarily the case, that it's not uncommon for disreputable agencies to apply for and obtain 501(c)3 status as a means of appearing more trustworthy, because people are more inclined to trust a nonprofit. I've read that they're not necessarily anymore legit. Anybody have any insight on this? It seems to be an issue that you get different answers no matter who you ask/where you go to look/research. So confusing.

Words, you're right. It's best to look also at 990 forms, Better Business Bureau/United Way ratings, lists of their funders, etc. . . all of which is publically accessible but kinda a PITA to look through, unless, (like me) you're used to going through such docs on a regular basis. Not really difficult, just has the potential to be a little tedious, really. That's why I offered to do a 5 minute research project on any org that the OP found ;)

[wordsmith]

I've read pretty reputable things about the National Foundation for Credit Counseling (CCCS, Consumer Credit Counseling Services, are often under the NFCC umbrella). I've read that they're truly non-profit, have very small fees only, and actually do take the lead on intervention with creditors to set up payment plans, versus leaving that ball in your court after you've paid their fees, like some of the not too legit ones.


http://www.nfcc.org/AboutUs/aboutus_01.html

[NewMrs.]

All I really want is some advice on what I should do. I've read everything I can read about debt managment, but I don't think I can do this alone and I'm wary of debt managment agencies. Does anyone have any advice on who I can talk to? A financial advisor/planner? If so, where do I find a reputable one in Philadelphia? Preferably one that won't charge a lot for services?

I know that you said that you have already done alot of reading on this, but I would still strongly recommend the book "The Total Money Makeover" by Dave Ramsey. One of the other boards I visit has a money forum, and the people on that board talk about Dave Ramsey alot, which is why I decided to start reading his work. His advice is not at all complicated, although it does take some dedication to follow. Also, "Total Money Makeover" includes alot of first-hand accounts by people who are currently paying off significant amounts of debt, and they are stuck throughout the book as a way of being encouraging and showing that alot of people are struggling with this.

[winneythepooh7]

I know that you said that you have already done alot of reading on this, but I would still strongly recommend the book "The Total Money Makeover" by Dave Ramsey. One of the other boards I visit has a money forum, and the people on that board talk about Dave Ramsey alot, which is why I decided to start reading his work. His advice is not at all complicated, although it does take some dedication to follow. Also, "Total Money Makeover" includes alot of first-hand accounts by people who are currently paying off significant amounts of debt, and they are stuck throughout the book as a way of being encouraging and showing that alot of people are struggling with this.


I will have to check him out myself. I've sorta gotten absorbed in money and finance blogs for this same reason: it's very motivating seeing that there are so many others in the same place, and sharing their tips and suggestions. And debt doesn't have to mean that one is living way beyond their means either. Resources like this are great because they offer wonderful tips on how to live a frugal lifestyle without totally depriving yourself in all areas. I read a blog last night about how to eat for a month on $30.00 that was really interesting.

[PhillyGirl23]

I've read pretty reputable things about the National Foundation for Credit Counseling (CCCS, Consumer Credit Counseling Services, are often under the NFCC umbrella). I've read that they're truly non-profit, have very small fees only, and actually do take the lead on intervention with creditors to set up payment plans, versus leaving that ball in your court after you've paid their fees, like some of the not too legit ones.


http://www.nfcc.org/AboutUs/aboutus_01.html

Thanks for all the great feedback! I have talked to my credit union and they recommended a credit counseling service that is the CCCS of Delaware Valley. They said they are a reputable firm, but I always have doubts. I know I have to be weary about them making on time payments and all, but my other main concern is what this will do to my credit rating. Right now my rating isn't bad as I always make ontime payments and whatnot. But I wonder if it shows up that I'm using this type of service if it will negatively affect my credit and ability to get things like a mortgage and such later on in life. Any thoughts on this?

[PhillyGirl23]

I know that you said that you have already done alot of reading on this, but I would still strongly recommend the book "The Total Money Makeover" by Dave Ramsey. One of the other boards I visit has a money forum, and the people on that board talk about Dave Ramsey alot, which is why I decided to start reading his work. His advice is not at all complicated, although it does take some dedication to follow. Also, "Total Money Makeover" includes alot of first-hand accounts by people who are currently paying off significant amounts of debt, and they are stuck throughout the book as a way of being encouraging and showing that alot of people are struggling with this.

That sounds great and I'll definitely check him out. I find it very comforting to know there are other people out there in my situation. It's an embarassing situation to be in, but at least I'm aware my situation and trying to work at getting out of it. Thanks for the advice.

[AshleyJordan]

But I wonder if it shows up that I'm using this type of service if it will negatively affect my credit and ability to get things like a mortgage and such later on in life. Any thoughts on this?
If you make your payments on time it should only help, not hurt, your score, no matter which company you pay through/with. Re. mortgages-- you'd probably be able to get a mortgage even now if you wanted to, your interest rate would just be higher the lower your score is.

[PhillyGirl23]

If you make your payments on time it should only help, not hurt, your score, no matter which company you pay through/with. Re. mortgages-- you'd probably be able to get a mortgage even now if you wanted to, your interest rate would just be higher the lower your score is.

Based on your previous message do you think that the Consumer Credit Counseling Service of Delaware Valley is a non-profit agency I should trust and talk to? At the very least I think I will call them, but I want to make sure I know all the information I need to before handing over all my money every month.

[wordsmith]

Thanks for all the great feedback! I have talked to my credit union and they recommended a credit counseling service that is the CCCS of Delaware Valley. They said they are a reputable firm, but I always have doubts. I know I have to be weary about them making on time payments and all, but my other main concern is what this will do to my credit rating. Right now my rating isn't bad as I always make ontime payments and whatnot. But I wonder if it shows up that I'm using this type of service if it will negatively affect my credit and ability to get things like a mortgage and such later on in life. Any thoughts on this?

My understanding is that if you go through CCCS, it will show up negatively on your credit report, but so will staying in debt/being over your head and drowning in late payments on your own. At least working with a credit counselor is a step toward solving the problem, though.

I found this, but as with any information that pops up on the net, I can't vouch for its accuracy, it's from a site called Credit Infocenter. Again, I can't vouch for any legitimacy. If it is accurate, I thought it was interesting, because there doesn't seem to be much of an upside, short of the fact that you ARE slowly chipping away more than you might be able to on your own, since they negotiate lower payments than you may be granted as an individual. However, if the lower payment rate is still held against you and still considered as rendering you delinquent, that seems a minimal incentive:

Q: Could you tell me about Consumer Credit Counseling Service, i.e., CCCS. How does it work? I am trying to manage my finances and restore credit. This service seems very workable. However, when the time comes (in the next year or so) that I want to borrow for a home, car, education or healthcare for my son, will my credit be worse from consolidating through such a company?

A. It would really depend on how bad your debt is. It may be the right thing for you but I don't usually recommend Consumer Credit Counseling Service unless someone is deeply in debt. It usually ruins your credit. Let me elaborate.

How CCCS works:

Consumer Credit Counseling Service talks to you to determine how much you can afford to pay each month. Then they negotiate with your creditors, getting them to accept lower monthly payments until all your debts are paid. CCCS will make you sign an agreement to not obtain any more debt until the current debt is paid off. You then make a single monthly payment. I believe the payment is made to CCCS and they pay your creditors.

The problem with this service is that many of your creditors, even though they agree to accept a lower payment, still report you as late to the credit reporting agencies because you are not making the full minimum payment. If they report you late, your credit report may show 30, 60, 90+ day lates-- essentially ruining your credit. You will have a good reason for why your credit rating looks this way but it will fall on deaf ears. Creditors don't care why it looks bad; they only care that it is bad. Your future ability to get another loan will be impaired to a certain degree. And don't forget that as long as you're on the CCCS plan, you can't get another loan anyway. You signed an agreement not to incur any new debt at the start of the process, remember?

[wordsmith]

On the upside, I do know somebody who had CCCS work with her, and she and her husband and new baby boy were able to repair their financial problems and are doing well and are happy and successful.

[PhillyGirl23]

On the upside, I do know somebody who had CCCS work with her, and she and her husband and new baby boy were able to repair their financial problems and are doing well and are happy and successful.

Thanks for the info. It's all just so confusing. That is my main problem. Not knowing who is an actual credible source to ask about counseling services ruining your credit. It seems everyone has a different answer.

[AshleyJordan]

Based on your previous message do you think that the Consumer Credit Counseling Service of Delaware Valley is a non-profit agency I should trust and talk to? At the very least I think I will call them, but I want to make sure I know all the information I need to before handing over all my money every month.

I can try to look more closely at their financial stability. I can't, however, make an educated guess on how that will impact you and your credit-- sorry!

[wordsmith]

Well, that's the thing. I can't say for sure what's legit, because EVERYbody has a different story.

But I do know people who are working their way out of credit problems who do not have ruined lives. That doesn't mean that they're on easy street, or that they're eligible for loans and/or will be for some time, but they're not living in boxes.

[PhillyGirl23]

In my continued research I found out that my employer offers an Employee Assistance Program. When you call you get transferred to an organization called CLC - Consolidated Legal Concepts. There you make an appointment with a certified attorney or financial counselor who will help you with your problems. They are a very legit organzation utilized by many Fortune 500 companies across the country. I have an appointment set up with them so I hope they can help at least give me legitiment advice. The initial consultation is free and then their services are offered at a 25% discount from the attorney/advisor's normal rate. I just thought I'd pass this information along if this is helpful to anyone else.

[AshleyJordan]

In my continued research I found out that my employer offers an Employee Assistance Program. When you call you get transferred to an organization called CLC - Consolidated Legal Concepts. There you make an appointment with a certified attorney or financial counselor who will help you with your problems. They are a very legit organzation utilized by many Fortune 500 companies across the country. I have an appointment set up with them so I hope they can help at least give me legitiment advice. The initial consultation is free and then their services are offered at a 25% discount from the attorney/advisor's normal rate. I just thought I'd pass this information along if this is helpful to anyone else.


I'm very glad for you! You've made a big step toward establishing future financial security.

[jrwilheim]

I would strongly recommend speaking to a credit counselor. I think Bankrate.com has an article about how to find one who is reputable--basically, look for one that is a non-profit agency, not a for-profit business.

[philosoph]

i'm a little late jumping into this discussion, but I wanted to share that I currently work with a non-profit credit counseling service affiliated with CCCS. this has been TREMENDOUSLY beneficial. the company charged me $25 to begin the program. I send one check to them monthly and they pay all of my creditors (on time, i might add). The counseling service negotiated lower interest rates on most of my cards as well. My credit has improved, and I could not have accomplished or handled the situation without help.
remember, asking for help when you need it is a sign of intelligence, not weakness.

[wordsmith]

I would strongly recommend speaking to a credit counselor. I think Bankrate.com has an article about how to find one who is reputable--basically, look for one that is a non-profit agency, not a for-profit business.

Again, as mentioned earlier, this isn't always the case. A place isn't reputable simply because it has not for profit tax status.

[entrophize]

I have recently turned over all of my consumer loan responsibilities to CCCS.

This includes defunct hospital bills, delinquent credit card accounts and a small handful of other high-interest obligations. So far they've paid my creditors on time and have reduced my monthly payments to about 50% of what they were prior.

From what research I've done, CCCS is a true non profit with a laundry list of satisfied clients.

[PhillyGirl23]

I have recently turned over all of my consumer loan responsibilities to CCCS.

This includes defunct hospital bills, delinquent credit card accounts and a small handful of other high-interest obligations. So far they've paid my creditors on time and have reduced my monthly payments to about 50% of what they were prior.

From what research I've done, CCCS is a true non profit with a laundry list of satisfied clients.


I think that is great. I spoke to a long litany of people after posting on here before and I finally was sent to Green Path Debt Solutions, who I was forwarded to by Bank of America after speaking with their hardship department. The woman I spoke to was extremely helpful and we mapped out what looks to be an attractive plan, but I am still not sure if I want to proceed.

Since I am not delinquent on any of my bills, I am wondering if I should try attacking this myself. I have just read "Total Money Makeover" and am applying for small part time jobs to help eat away at the debt faster. I have set up all my bills on Quicken (which is great, I might add) and finally created a budget. I think I am going to try that out first and see how it goes. I am still iffy about the effect of using debt consolidation services on my credit report. To those that have used it before, what negatives have you seen on your report?