How to Get Free Credit Counseling in Alabama
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Below we will discuss how to find a nonprofit Alabama credit counseling agency, talk about what things you can research in advance before you speak with the nonprofit organization, and suggest some questions to ask before you sign up. If you decide to meet with an Alabama credit counseling organization we will also discuss what to expect and explain a bit more about the likely recommendations for the next steps.
Written by Attorney Eva Bacevice.
Updated August 27, 2024
If you are experiencing financial problems in Alabama then you are certainly not alone. Alabama currently has a poverty rate of 18%, making one of the five highest in the United States. If so know that credit counseling may be able to help. Credit counseling in Alabama allows you to meet with a certified counselor, one-on-one, to help review your current financial situation and offer a personalized plan for your next steps. At a reputable nonprofit agency (more on this below) you will find financial counselors who have been trained and certified in consumer credit, money and debt management, and budgeting. They can offer advice on managing your money and bills, help you create a budget, help you obtain your credit report, offer educational materials and/or workshops on money management, and work with you to figure out a plan to deal with your debt. This is a service that can be helpful to both people who are behind on their bills as well as those who are struggling to keep up but not yet behind. The first appointment usually lasts between 45 minutes and an hour and should be offered for free. Generally, at the end of the appointment, the Alabama credit counselor can recommend either a debt consolidation, a debt management plan, or bankruptcy. Unfortunately, in addition to many wonderful nonprofit organizations that offer these services, you will also encounter some for-profit companies whose interest is focused on their bottom line over your financial goals. This article will show you how to choose an Alabama credit counseling agency that is focused on your interests with confidence and highlights some red flags to watch out for. As a quick reference, any company that is promising you can be debt-free quickly or is pushing a debt settlement solution over all others is probably not looking out for you. Most reputable nonprofit Alabama credit counseling agencies are not going to suggest debt settlement as a solution except in very limited circumstances. Debt settlement involves a fee for services, offers to settle your debts for smaller amounts which only works if the creditor agrees to it (and some will not under any circumstances) and presumes that you have a reserve of money available to pay off a lump sum. This article will focus instead on offering an introduction to Alabama credit counseling as a possible solution for your financial problems and how to go about the process.
How to Get Free Credit Counseling in Alabama
Below we will discuss how to find a nonprofit Alabama credit counseling agency, talk about what things you can research in advance before you speak with the nonprofit organization, and suggest some questions to ask before you sign up. If you decide to meet with an Alabama credit counseling organization we will also discuss what to expect and explain a bit more about the likely recommendations for the next steps.
Find Alabam Nonprofit Credit Counseling Agencies
Your first step is to find a reputable nonprofit credit counseling agency where you can meet with an Alabama credit counselor. You’ll see from a quick Google search that you can find quite a few online. To find the reputable ones start by narrowing the list down to nonprofit organizations. Be careful though, the nonprofit designation alone does not mean that the agency is the right fit for you or truly focused on debt relief. You should look for a range of services beyond credit counseling services, like financial education and debt repayment.
You might also narrow down Alabama credit counseling agencies by the meeting options. You will find plenty of reputable Alabama nonprofit organizations to provide online services or over the phone. If you prefer to meet in person, however, you can check out some local Alamaba credit counseling agencies or Alabama branches of national organizations.
Information to Research Before Talking to an Alabama Credit Counseling Agency
Before you take the time to meet with a credit counseling agency in Alabama, it’s a good idea to do a little research so that you can feel assured you have found a truly reputable one. For example, you should verify that the Alabama credit counseling agency is properly accredited by the National Foundation for Credit Counseling (or NFCC.) You can also check with Alabama’s consumer protection agency, which is the consumer interest division of the Alabama attorney general’s office. There, as well as with the Better Business Bureau, you can see if an agency has been flagged for any complaints and see how it is rated. You can take a look at their website to see what range of services they offer beyond credit counseling services and ask for informational or educational materials in advance. Any reputable agency will provide those for free without requesting any personal information from you. If the agency tries to charge you or obtain information that is a red flag.
Questions to Ask the Alabama Credit Counselor Before Signing up
It is completely ok to call the Alabama credit counselor before signing up and asking whatever questions you have to make sure your comfortable with the credit counseling organization. For example, you want to make sure you will be meeting with a certified credit counselor. Usually, financial counselors are certified or trained in consumer credit counseling, money and debt counseling and budgeting. You can also ask about any costs and fee structures. As mentioned above the initial session should always be free. If you receive a recommendation for a debt management plan and decide to follow it there may be set up fees and/or monthly fees, so it is good to know going in what those might be going in. These fees are usually reasonable and you can also ask if there is any assistance available if you feel you cannot afford any fees. You can ask about the logistics, such as how to best prepare and what materials to bring for your session. You can request free informational materials to review before you sign up, again any attempt to charge you or gain personal information at this point means you should just move on.
What to Expect During Credit Counseling?
During your credit counseling in Alabama, you can expect to meet one-on-one with a financial counselor, whether in person, over the phone or online. You can bring along whatever documents that they recommend, which will usually include your recent pay stubs or other proof of household income, your recent bills and any budget information you may already have. During the appointment, with your permission, the counselor may show you how to access your credit report and score to get a clearer picture of your total debts. You should expect that the counselor will complete a thorough review of your financial situation and offer a personalized plan for your next steps. Generally, the next steps will be either a debt consolidation, a debt management plan or bankruptcy.
What Happens After Credit Counseling in Alabama?
After you complete your credit counseling session you should have a pretty clear path for moving forward that may include additional sessions or educational workshops. If you receive a specific recommendation for debt consolidation, a debt management plan or bankruptcy counseling please read on for a more in-depth explanation of each.
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Alabama Debt Consolidation
Depending on your circumstances a debt consolidation might be the best solution. A debt consolidation involves taking out a new debt at a lower interest rate to pay off your existing debts so that you only have to make one payment every month. This may be a good solution if your debts are primarily credit cards with high-interest rates, you have a decent credit score and are generally good at managing your money. If, however, in addition to dealing with credit card debt you also have other debts like student loans or medical bills and are unable to get a lower interest rate loan due to a poor credit score, then another solution might be better.
Alabama Debt Management Plan
A debt management plan is a way for you to attack your debt without taking on any new debt. If you decide to go this route, your credit counselor can negotiate on your behalf with your credits to lower interest rates and possibly relax late fees. They will also work with you to create a reasonable budget with an affordable monthly payment that they will then distribute for you on your debts. A debt management plan can include multiple kinds of debts and may have a setup fee or monthly fees associated with it. If, however, you miss a payment or are unable to afford to keep up due to a change in circumstances it could cancel the agreement.
Alabama Bankruptcy
If you can’t afford any sort of payment plan or reasonably keep up with your current obligations then bankruptcy might be the best solution for you. Bankruptcy is a legal remedy available to individuals (and companies) to allow you to walk away from some (or all) of your debts and get a fresh start on your finances going forward. You can learn more about bankruptcy in Alabama from Upsolve, a nonprofit designed to help people file their own Chapter 7 bankruptcy case when they can’t afford an attorney. You can also check out Upsolve’s screening tool to see if you qualify for this free service to help walk you through your bankruptcy every step of the way.
