 With the struggling economy, many people are finding themselves deep in credit card debt. Therefore, consumers are forced to turn to debt consolidation in order to get control of their finances. However, before a person decides to consolidate their credit card debt, they need to be aware of the credit... |
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Living with debt is by no means easy. There’s the constant concern of living paycheck to paycheck and the never ending issue of covering monthly bills and living expenses. While most of us pride ourselves on being self-sufficient, it’s hard to ignore that we all sometimes live well beyond our means.... |
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Many Massachusetts residents, much like the rest of the country, have found themselves having credit card debt problems recently. Whether caused by divorce, unemployment, or poor budgeting, the problem remains the same, and the importance of having good debt consolidation companies and consumer credit counseling services to help people in need of financial assistance has becoming increasingly urgent. In order for consumers to get out of debt the best way for their situation, they must first understand what types of credit card debt management programs are available, as well as how to tell reputable companies from the unscrupulous ones. The purpose of this page of PayingPaul.Com is to help Massachusetts consumers along in this journey. The two leading forms of debt consolidation currently being offered are debt settlement and credit counseling. Although the underlying goal of each service to help people pay off their debts faster, the way they go about accomplishing this is very much different. Debt settlement companies negotiate with creditors to reduce the amount you owe, whereas credit counselors work with credit card companies to obtain credit card interest charge reductions. Although debt settlement is generally the fastest way out of debt besides bankruptcy, it does come with its disadvantages. In a settlement plan, a consumer stops paying their creditors and saves money each month into a savings account. Once sufficient funds have accumulated, the settlement company will offer a lump sum of money for less than the balance to completely satisfy the debt. Until that happens though, creditors will take steps to collect the balance including calling you, sending threatening letters, and in some cases, initiating a lawsuit. Credit counseling is more conservative approach that promises less overall savings, but may be a better option depending on your circumstances. The organizations who offer these services are typically non profits, and they can help analyze your budget, as well as provide financial education that may help you better manage your debt. Your credit counselor may suggest enrolling in a debt management plan. In these plans, you can enjoy a reduction in your interest rates, waived late fees, and a general reorganization of your debt. Before choosing this route, however, one should ask their credit counselor about their fees (they do charge fees even though they are non-profit) and the potential credit implications of this route for debt reduction. Do you want to discuss your debt relief options with an expert? Submit a form today! Massachusetts Debt Management Regulations Like many states, Massachusetts has laws that regulate the debt consolidation industry. These laws are in place to protect consumers, but unlike other states, the regulations in place do not deal with the fees that debt management companies can charge. Definition According to Massachusetts law, a credit counseling service is defined as “the providing of financial and budgetary advice and judgment to individuals in connection with the creation of a budgetary plan; or (b) the creation of a plan whereby an individual turns over an agreed amount of his income to a nonprofit credit counseling corporation which distributes it to his creditors in accordance with a plan which they have approved and which may provide for smaller payments or a longer term than the original contract; or (c) the providing of educational services relating to the use of credit; or (d) any combination of these.” Massachusetts law only allows attorneys and non-profit credit organizations to engage in “the creation of a plan” where the debtor turns over money to be disbursed to creditors. For more information about credit counseling and debt consolidation in the state, follow this link: http://www.mass.gov/legis/laws/mgl/180-4a.htm Other Resources Filing Bankruptcy in Massaschusetts Bankruptcy Laws in Massachusetts Debt Collection in Massachusetts |
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