There's an ugly side to Consumer Credit Counseling. These companies bill themselves as not for profit companies created to help consumers get out of debt. The truth is considerably different!
Most of us have bought into the banking industries hype that when a consumer gets in trouble with debt, the first stop should be consumer credit counseling. After all these non-profit organizations only have the consumers best interest at heart. It's the only non-partial place to get good information about tackling debt - right? WRONG!
In our current economy, the government refers consumers to CCCS organizations. Many bloggers here on Active Rain advise clients to call Consumer Credit Counselling if they get in trouble with debt or fall behind on their mortgage. While there is some educational value to CCCS, in many cases this advise is wrong.
Here's the truth:
Most CCCS companies are indeed set up as not for profit. What isn't disclosed is that the non-profit company is actually owned by a bank. In reality most of these companies are set up as 2nd or 3rd tier companies so that they are distanced from the true ownership.
In 2007, when the bankruptcy laws were revised, CCCS became a requirement before a consumer would be allowed to file for bankruptcy. At a cost of $60 - $90, in addition to Attorneys Fees, the consumer takes an on-line course designed to teach them how to manage money. MAJOR Red Flag. The revision to the bankruptcy laws were a direct result of the powerful banking lobby. Everything about the law benefited banks -including the CCCS requirement.
What Is Consumer Credit Counseling?
Hardship based program designed to help consumers who can no longer make the minimum payments on their credit cards.
Once enrolled the interest rate on the debt is lowered, but the principal balance remains the same.
How Does Consumer Credit Counseling Work?
A monthly payment is established and an auto-draft is debited from the consumers checking account once a month. The CCCS controls the money from this point forward. The monthly payment is usually lower than the current minimum payments, but not dramatically. In some cases it's higher!
At this point the consumer loses control of which creditors get paid and which ones don't. Monthly payments get made to some creditors but not all.
A public notation is made on the consumers credit report showing that they have been enrolled in a consumer credit counseling program. For all intents and purposes, this public notation acts like a bankruptcy.
The CCCS is paid a fee by the consumer and it's also paid a fee by the banks it represents.
At the onset, the CCCS program length is usually established to be 5 years. Unfortunately when 5 years arrives the consumer is usually still in debt and the program continues. The actual program length is usually 7 - 9 years.
Pros of consumer Credit Counseling
Financial Education
It can keep you out of Bankruptcy.
Cons of Consumer Credit Counseling:
The consumer loses control of their money.
No new credit can be established when enrolled in a consumer credit counseling company. That's 7 - 9 years of living without credit - that's a long time.
The payment is usually higher than what the consumer can afford.
The failure rate is 70- 80%. This can be attributed to the length of the program and the high payment doesn't really provide relief.
Because interest is still being charged, the balances are slow to drop. Usually, the consumer ends up in more debt, not less.
You definitely won't be buying a house anytime soon when enrolled in CCCS.
The main reason that people enter consumer credit counseling is because they believe that payments will be made to their creditors. CCCS is not what it's billed out as. Think twice before entering such a program.
Don't be fooled. At the end of the day, Consumer Credit Counseling benefits the banks, not the consumer.
I am Kate Bourland. I help my clients get out of debt, get loan modifications and establish a debt free lifestyle. We Guarantee our Loan Modifications. You can reach me at 530-419-3967.
Is anyone else perplexed by the Governments plan of action regarding the banks that are failing the big scary "STRESS TEST?"
I'm not getting the downside to these banks.
The rules as I understand them are:
Bank Fails Stress Test and needs $xxx amount of capital.
Bank has six months to raise capital from the private sector.
If the banks can't raise private capital, the Government bails out bank with Taxpayer Money?
What's wrong with this picture?.
Under this plan the banks are not required to improve operations. It will be business as usual. Short Sales, REO's and Foreclosures will continue to be grossly mismanaged.
Unless the rules have changed in the last few days :
As a consumer if you fail to pay your mortgage the banks foreclose, no bailout, no reprieve no safety net.
If your business fails the banks won't give you a bailout. No safety net there. You lose your business - period.
These under-capitalized banks need to be broken up into smaller regional banks that can effectively react to the needs of the local market. There is no excuse or logical argument that can explain the current enviornment.
Under the current capital plan, the only downside to the banks is that the government is given preferred stock that it may or may not be able to convert to common stock at some point in the future.
hmmmm, Government owned common stock equates to nationalization of our banking system. Is that what this is all about nationalizing our banks or am I just missing something?
I am Kate Bourland. I help my clients get out of debt, get loan modifications and establish a debt free lifestyle. We Guarantee our Loan Modifications. You can reach me at 530-419-3967.
Two Re-Replet recycling centers have opened here in Redding.
I love these machines because they make it so simple to bring in just a few bottles so I don't have to save up the cans and bottles in big plastic bags that get smelly or worse attract bugs.
I recycle here all the time. It's like a vending machine. You simply feed the cans into the machine and it counts them, adds up your money and you print a redemption ticket. The redemption tickets can be taken into Holiday Market for cash!
So simple and easy.
One of the really neat things about these recycling centers is that they are completely self contained.
Inside the building the bottles and cans are sorted and crushed right on site. This diminishes the carbon footprint from having to truck the uncrushed cans somewhere else.
Brilliant.
Right now there are two Re-Planet recycling centers here in Redding.
The Holiday Market Shopping center on Placer and Buenaventura. You'll find the center next to Blockbuster on the Buenaventura side of the center.
The second center is located behind hte Holiday Market off Highway 273.
Re-Planet is an international company with centers across the United States.
Check out the Re-Planet Websitefor information on how recycling pays and the positive impact that it has on our environment!!
I am Kate Bourland. I help my clients get out of debt, get loan modifications and establish a debt free lifestyle. We Guarantee our Loan Modifications. You can reach me at 530-419-3967.
I've been following an often heated debate regarding Mortgage Accelerator Programs. I'm a proponent of these programs for a number of reasons, but primarily because they provide a system to follow that eliminates debt and creates wealth. Systems are powerful because they take away the guesswork and allow decisions to be made from a position of strength.
That said, being debt free, even mortgage free, is not the same as financial freedom.
Being debt free does not mean that money is suddenly going to fall from the sky and solve all your financial problems. At the end of the day, even if you have no debt, you still have Putting food on the table, paying taxes and other fixed expenses are a necessary part of life.
Don't get me wrong, helping people find viable solutions to get out of their debt is what I do. That said, debt is only one piece of the puzzle.
So What is Financial Freedom?
Financial Freedom is the freedom to focus on what is truly important to you without having to trade time for a wage. It is driven by passive income producing assets, which generates sufficient income to cover your yearly expenses on an ongoing basis.
In a nutshell Financial Freedom means that you have both time and money.
How Do you Achieve Financial Freedom? There are really only two steps:
Step 1: Start with a system. Systems leverage all resources to highest and best use. A debt elmination system should:
Be Flexible
Be easy to Understand
Allow for financial changes as they occur in life. An individuals financial needs are going to change over their lifetime. What is right for a 30 year old will not be right for 50 year old.
Make sure that there is a cushion to cover unexpected expenses as they arrive. This can be in the form of cash savings or access to credit.
Provide projections on
Step 2: If you have to buy something, only buy assets. Assets will either provide income or appreciate in value over time.
It really is that simple.
Kate Bourland is a Debt and Credit Specialist who creates customized Debt Solutions and wealth plans fore every client. Got Debt? I can help! Call today - 1- 530-419-3967.
This is one of those questions that I get asked often. I couldn't have said it better than Donna. In the order of preference go for a loan modification first, a short sale second and a foreclosure as a last option.
There are many homeowners today without a clear understanding of the differences between a foreclosure and a short sale. The consequences a homeowner faces between the two can have a huge impact on their credit and employment especially if their job requires a security clearance.
In an effort to help these homeowners who may not be aware of the advantages and disadvantages of foreclosure vs short sale, I would like to explain the points at issue and consequences of both.
In a foreclosure credit your credit score may be lowered from 250 to over 300 points and it typically can affect your score for over 3 years.
With a successful short sale on your home only late payments on a mortgage will show and after sale mortgage will be reported as paid or negotiated. If all other payments are being made this will lower the score as little as 50 points. The effect of a short sale can be as brief ans 12 to 18 months.
Your credit history in a foreclosure will remain as a public record for 10 years or more.A short sale is not reported on your credit history as there is no specific reporting item for a "short sale." The loan is typically reported "paid in full, settled."
Outside of a conviction of a serious misdemeanor or felony a foreclosure is the most challenging issue against a security clearance. If you are in the military, in the CIA, Security, are a police officer or any other position that requires a security clearance and have a foreclosure in almost all cases that clearance will be revoked and the position terminated. A short sale on its own does not challenge most security clearances.
If you are currently employed employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. In many cases a foreclosure is grounds for immediate reassignment or termination. Since a short sale is not reported on a credit report it is as a result not a challenge to employment.
In the case of future employment many employers are requiring credit checks on all job applicants. In most cases a foreclosure will challenge employment and is one of the most detrimental credit items an applicant can have. As stated above because a short sale is not reported on a credit report as a result is not a challenge to employment.
A bank has the right to pursue a deficiency judgment in 100% of foreclosures (except in those states where there is no deficiency). It is possible in some successful short sales to convince the lender to give up the right to pursuit a deficiency judgment against a homeowner.
In regards to deficiency judgment amounts a home in foreclosure will have to go through an REO process if it does not sell at auction and can in most instances result in a lower sales price and longer time to sell in a declining market. This will result in a higher possible deficiency judgment.
When a short sale is properly managed a home is sold at a price that should be close to market value and in almost all instances will be better than an REO sale resulting in a lower deficiency.
The period for eligibility of a future loan differ greatly between a homeowner who loses a home to foreclosure and a homeowner who successfully negotiates and closes a short sale.
Effective May 21, 2008 the homeowner of a primary residence who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. With a successfully negotiated and closed short sale a homeowner will be eligible for a Fannie Mae backed mortgage after only 2 years. In a non-primary residence an investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. In a successfully negotiated and closed short sale an investor will be eligible for a Fannie Mae backed investment after only 2 years.
Eligibility for a future loan with any mortgage company for a homeowner who loses a home to foreclosure will affect their future rates and will require the prospective borrower to answer YES to question C in Section VII of the stand 1003 application that asks "Have you had property foreclosed upon or given title or deed in lie thereof in the last 7 years?" There is no similar question or declaration regarding a short sale.
A short sale is an emotional transaction but as a Certified Distressed Property Expert, I want to help take the stress out of losing your home to foreclosure and explain the full range of solutions that are available. Call me today for a confidential consultation.
Donna Bigda Licensed Connecticut REALTOR® 10 Pine Orchard Road Branford, Connecticut 06405
Disclaimer: All information provided by this author is strictly an opinion, is not guaranteed, may be based on information collected from several sources, which may or may not be deemed reliable at the time of researching this article and may be time sensitive. Sellers are advised to obtain legal advice regarding the advisability and terms of any short sale agreement with creditor(s) and professional tax advice regarding tax implications of a sale.
Spring is a beautiful time of year when the plants around us come to life. It's a rebirth of everything beautiful. Spring is when we plant our gardens, carefully choosing the plants, the soil and the location. Once planted we nurture it until we harvest the fruit of our labor of love.
As we approach this Spring and start to prepare our gardens, I can't help but think about spending some time planting the seeds of Prosperity. These are challenging economic times. Many of us are still in Winter when to comes to our prosperity. This spring, how about spending a little time planting the seeds or prosperity. garden.
Dictionary.com defines prosperity as a successful, flourishing, or thriving condition, esp. in financial respects; good fortune.
So how does one go about planting seeds of prosperity? To start, think about how you would go about planting a garden.
Step One: Planning
Decide what seeds you are going to plant and when you want to harvest those plants.
Will you be planting vegetables or fruit.
When do you plan to harvest what you plant? Summer or Fall?
When you are planting for prosperity this means setting financial goals.
Where do you want your financial future to take you?
What does financial prosperity look like to you?
Does it mean more clients, less debt, more savings?
Draw a picture of what your prosperity will look like?
Step Two: Ammending the Soil
What do you need to amend the soil of your garden with to get the desired results?
Is it rich organic mushroom soil for healthy and big vegetables or is a soil designed to grow beautiful roses in? Or will you plant a tree that will provide shade for years to come?
When amending the soil for prosperity you need to choose how to enrich yourself so that you can reach the goals you set in Step One.
Will you take classes to further your education?
How will you stretch yourself so that you gain the skills needed to reach the prosperity you desire?
Will you tackle your debt and set yourself up for long term financial health,
How about adding adding another profit center to increase income?
Most important in this phase is developing a prosperity state of mind.
Step 3: Planting
This is where you get your hands dirty.
Dig the holes, and plant those seeds.
Water them in.
Planting for Prosperity means taking action every day to reach that prosperity goal.
Take the step to enroll in that social networking class
How about making an appointment with a financial consultant to plan for the future
Talk to a debt consultant about strategies for managing debt.
Step 4: Nurturing
Water your garden daily or as appropriate.
Pull the weeds, stake the plants and watch them grow.
Nurturing your Financial Prosperity will entail:
spending a few minutes each day focusing on your prosperity
defining 1 or 2 actions that you'll take that day towards your prosperity goal.
Spend a few minutes each day focusing on a prosperity mindset and focusing on abundance.
Step 5: Harvesting
Here is the fun part, harvesting those beautiful plants that you grew.
Imagine right now what your prosperity harvest will look like? Draw a picture and see yourself harvesting your plans.
The beautiful prosperity garden will provide great joy for years to come in the form of financial freedom.
What seeds of prosperity will you plant this spring?
Kate Bourland is a Debt and Credit Specialist who creates customized Debt Solutions and wealth plans fore every client. Got Debt? I can help! Call today - 1- 530-419-3967.
Debt is one of those words that brings up all kinds of negative emotions, fear, shame and guilt among them. It's also a topic that everyone has an opinion on.
Some will argue that some debt is good while others will argue that all debt is bad.
What I find most interesting is the idea that there is a single best way to get out of debt. The truth is that there is no one size fits all strategy to eliminating debt. There are however two truths when it comes to tackling debt:
You must spend less than you make.
In order to spend less than you make you must either increase your income or lower your expenses.
The trick is figuring out the combination for your individual circumstances. If you have suffered a Financial Hardship, your strategy will be different from someone who hasn't undergone such an event. It's important to understand the difference.
A financial hardship is anything that has lowered your income or increased your expenses to the point where you can no longer afford to make your minimum payments. Financial Hardships include loss of job, reduced income, a house payment that has adjusted upward, birth of a child, medical expenses.
If you have suffered a financial hardship your choices are going to be as follows:
Continue to try to make the minimum payments, missing a payment here and there and living off of credit cards. This is a ticking time bomb and you hurt your credit big time usingthis strategy.
Credit Counseling (aka - CCCS): These organizations are typically sheep in wolves clothing. They are usually owned by credit card companies themselves and take money from you the consumer and the credit card companies themselves. They work by lowering your interest payments, and charging you a monthly fee to manage your debt. You send them a monthly payment, that is slightly lower than your current minimums and decide who gets paid and who doesn't. CCCS also puts a mark on your credit report which acts as if you've undergone a bankruptcy. The quoted payoff time is typically 5 - 7 years but typically it's 7 - 9 years before you are out of debt.
Debt Settlement: Debt settlement companies will actually tackle the principal balance of your debt. They do it by negotiating with your credit card companies and will save you 50 - 60% off the principal balance. A good company will have you out of debt in 2 - 3 years, no longer than 48 months. There is no hardship program that is faster or more effective than debt settlement. Your credit takes a serious hit when you are in the program but it quickly recovers once all your debt is paid. It's not for everyone and it only works with unsecured credit cards, medical bills, and personal loans. Be wary as there are a lot of new companies cropping up who don't have your best interest in mind.
Bankruptcy: Bankruptcy is the last alternative. The goal of Debt Settlement and Credit Counseling are to help you avoid bankruptcy.
In most circumstances, debt settlement is the least harmful and most effective of the hardship categories.
For those who are not in a financial hardship, your options are much wider. The debt strategy that is right for you will depend on your goals, your age, and your exit strategy. By your exit strategy I mean what do you want to do once you are completely out of debt?
Your options are going to be debt consolidation loans, debt roll-down strategies, interest cancellation strategies, or a combination of all three.
The solution is to seek help from a professional who is experienced in reviewing individual situations. There is no one size fits all solution to managing debt. What works for you might not work for your neighbor. If you find yourself struggling to make payments, get a qualified opinion sooner, rather than later.
Kate Bourland is a Debt and Credit Specialist. Customized Debt Solutions. Got Debt? I can help!
Kool April Nights is will be rumbling the streets of Redding again starting April 15th. This fun four day event brings out the cars from the 50, 60's 70;s and 80's.
The highlight of the event is the annual cruise where parts of Churn Creek and Hilltop are closed down from 6 - 8pm. This fun street fair and car cruise is enjoyed my the entire town. We bring our coolers, and lawn chairs and enjoy the sights and sounds of beautiful cars. Some are restored, some not. But it's all fun stuff.
Overall 2,300 classic cars will cruise the streets of Redding.
This past week Bill HR 875 was introduced with little media fanfare. I saw a little bit of news coverage which basically espoused how the bill was designed to make our food supply safer. Like so much going on in our government right now, nothing is further from the truth. It turns out that HR 875 is an attempt by two major corporations, one of which is Monsanto, to eliminate organic seeds from our food supply and replace them with genetic and chemically altered seeds.
This has the potential to put small organic farmers out of business. It will effect the real estate value of rural farming towns and will forever change our food supply. Don't let this happen.
It could end Farmers Markets - this is serious business! Don't Let It Pass.
If you understand the importance of sustainable agriculture and choose to eat organic and pure foods as nature intended for our bodies, please take a second to call your congressional rep and ask them to vote down bill HR 875 which will outlaw organic farming. If we all do not do our part, we'll be stuck with GMO and pesticide-ridden garbage "foods."
If this passes, then NO more organic ancient heirloom seeds will be allowed. Instead only Monsanto genetically altered seeds that are now showing up with unexpected diseases in humans will be legally grown.
The US House and Senate are about (in a week and a half) to vote on bill that will outlaw organic farming (bill HR 875).
This bill is cleverly disguised to fool Americans into thinking it's to our benefit. is also disguised as the Food Safety Modernization Act of 2009 (bill HR 875).
Main backer and lobbyist is Monsanto - chemical and genetic engineer ing giant corporation along side Cargill, ADM, and about 35 other related agri-giants. This bill will require organic farms to use specific fertilizers and poisonous insect sprays dictated by the newly formed agency to "make sure there is no danger to the public food supply". This will include backyard gardens that grow food only for a family and not for sales essentially making tons of money for these companies through the sale of their pesticides and also polluting our waterways.
Let others lead small lives, but not you. Let others argue over small things, but not you. Let others cry over small hurts, but not you. Let others leave their future in someone else's hands, but not you.
-Jim Rohn
This is one of the most powerful quotes that I've read in a long time. What will you do this week to live a large live? What will you do to take charge of your own future?
Kate Bourland: I am committed to helping my clients find solutions to their financial challenges. Call me if you are at risk of losing your home to foreclosure and need a loan modification. I can help. Too much credit card debt - let's find a solution that works for you. Wanna pay off your home fast- call for a free analysis. Ask me how I can help you manage your debt... it's easier than you think. You can reach me at 530-419-3967.
This Blog is my voice on the political, financial and social implications of debt. My goal is to encourage my readers to think outside their own personal reality and to challenge the social and political truths we have been taught about money, finance and our "free market" economy.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Two Re-Replet recycling centers have opened here in Redding. 
Re-Planet is an international company with centers across the United States. 
Debt is one of those words that brings up all kinds of negative emotions, fear, shame and guilt among them. It's also a topic that everyone has an opinion on. 
;)
;)
