With the housing debacle having thrown yet another burden onto the backs of consumers, many who are struggling to say financially afloat are seeking professional help for the first time in their lives. “We’re busier than we have been this time of year in other years,” said Nicholas Danner, one of three credit counselors in Green Path Debt Solutions in Grand Rapids, MI.
"We have a fair number of clients with some kind of housing issue. Either their mortgage payments are past due or they’re facing foreclosure.” Danner said the demographics of clients run the gamut, “but if you were going to pick a spot in the middle, typically it’s the family with a couple of kids that’s in trouble.”
Qualifications
Counselors in Michigan and most other states must be licensed by the state Department of Commerce, which requires passing an exam. In addition, GreenPath, with additional Michigan offices in Battle Creek, Kalamazoo and Muskegon, requires its counselors to participate in three internal training sessions a year and pass a series of tests issued by the National Foundation for Consumer Credit.
“Most credit counselors can help you get into a debt management program. Depending on your particular situation, you would make a deposit to us and we would distribute that amount to your creditors. We can help you save money each month by getting creditors to bring down their interests rates and reduce your payments.”
Cost
Clients engaged in a debt management program with Green Tree are required to pay a $25 one-time set up fee and a monthly fee capped at 15 percent of what GreenPath pays out to creditors, or a maximum of $50, according to Danner, a veteran of 12 years in the credit counseling business. “Most folks make up what they pay into the program with the interest and fees the program saves them,” Danner said.
The Last Straw
Grace Gilman, a 10-year veteran credit counselor, one of four with American Debt Counseling in Kalamazoo MI, said a lot of things can contribute to that “last straw” that motivates someone to seek help.
“It could be losing your job, an illness, or just getting overextended trying to make ends meet,” she said, adding that at ADC the first session with a client is free and lasts about an hour. Clients being helped on an ongoing basis are charged a fee that’s determined by what they can afford.
“A lot of what we work with is credit card debt. We work out a budget with the client and contact their creditors to get them reduced interest rates and smaller payments. We also work with mortgage and utilities, and that way we have pretty much everything covered.
“Most creditors are willing to work with us. The only ones that don’t help a lot are the cash advance places,” she said.
As the economy has worsened, a lot of people who have been completely self sufficient have given in to admitting they need help settling their debts and keeping them solvent and out of bankruptcy. To avoid being taken advantage of by unscrupulous debt consolidators, it’s wise to determine their legitimacy with whatever state agency that’s responsible for their licensure. A reputable credit counseling service will charge nominal fees that in the long run may save the client more money than he or she owes.
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