Financial and Credit Card Help

Personal finances and credit card debts can get out of control for various reasons, whether from job loss, catastrophic illness or simple overspending. You may require assistance if you keep sinking financially despite your best efforts to stay afloat. The Federal Trade Commission (FTC) advises that there are legitimate help sources for credit card bills and overall debt management, but warns there are also some scams to be aware of.

Counseling and Education

Speaking to a professional, studying educational materials or taking financial classes are all simple sources of financial and credit card help. Legitimate non-profit credit counseling companies provide a variety of free self-help materials and no-cost or inexpensive classes on budgeting, getting out of debt and similar topics. You can speak to a counselor at the company's office, online or on the phone for free or a reasonable fee if you need a formal one-on-one session. Reputable counseling firms have trained employees who assess your particular case and can make specific recommendations.

Payment Plan

Many credit counseling companies set up and administer payment plans for clients who need structure to handle their credit card bills and other debts, according to the FTC. Your counselor speaks with your creditors to set up a payment plan and can sometimes get concessions, such as lowered interest rates or waiver of late fees. You send a lump sum to the counseling firm monthly, and it disburses individual payments to the creditors. You are typically out of debt within five years or less if you follow the payment plan.

Bankruptcy

Bankruptcy may be your only option if your finances are so bleak that you have no possibility of repaying your credit cards and other bills. You have two choices, Chapter 7 or Chapter 13. Chapter 13 requires some repayment of your debt but on manageable terms spelled out by the court, and you get to keep most of your personal property. Chapter 7 relieves you of virtually all debt, but most of your assets will be sold.

Warning

Scam artists prey on people with credit card debt and financial problems. Some call and claim they can lower your interest rates. They charge several hundred dollars and are often unsuccessful at adjusting your rates, the FTC warns. Others run credit counseling firms that charge unreasonable fees or set up payment plans, then keep the money instead of paying your bills. Hang up on telemarketers who make unrealistic promises, and never give out credit card account numbers or financial information to unknown callers. The Better Business Bureau advises choosing a counseling company that belongs to a professional organization and has certified counselors.