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Chapter 12. CREDIT COUNSELING AND CREDIT... > Credit Counseling Agencies (CCAs)

Credit Counseling Agencies (CCAs)

Sometimes a credit counseling agency is able to negotiate a plan with your creditors through which your creditors will agree to accept reduced payments. A credit counseling agency also may be able to persuade your creditors to agree to reduce your finance charges or waive late fees. Often, the way credit counseling agencies work is that you pay them a single amount each month that they distribute on your behalf to your various creditors in accordance with the plan established by them with your creditors. Such a plan can take anywhere from a year to four years to pay off your creditors. If it takes longer than four years to pay off your creditors, you may be better off considering bankruptcy. Some credit counseling agencies charge you little or nothing for their services while others may charge monthly maintenance fees. Many credit counseling agencies are actually partially funded by contributions from the credit card companies and other creditors.

“I Have Always Depended on the Kindness of Strangers”

Those were the words spoken by the character of Blanche DuBois in Tennessee Williams's classic play, A Streetcar Named Desire. It also could apply to how the credit counseling industry worked at the time of its inception during the 1960s. Most of the original credit counseling agencies were part of the National Foundation for Credit Counseling (NFCC). They were local non-profit organizations through which trained counselors provided financial education and advice on how to deal with debt problems as well as information about personal budgeting in order to help avoid those problems in the future.


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