How to Get Free Credit Counseling in Arkansaas

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Written by Eva Bacevice, Esq.  
Updated November 30, 2019

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Summary

It is possible to find reputable free credit counseling in Arkansas by following the five-step process below. This will include suggestions on how to find the right agency, how to make sure they are reputable, what questions to ask to make sure it is a good fit, what to expect and what are the next steps.

If you are facing financial problems in Arkansas, you are not alone. Despite being the home to six Fortune 500 companies, most notably Walmart, Arkansas has a poverty rate of over 18%, which results in one out of every 5.5 Arkansans living in poverty. When you’re underwater financially it can feel overwhelming to figure out where to even begin. That’s where credit counseling can come in. Arkansas credit counseling can help you determine what the next steps are best for you in your current situation. Arkansas credit counseling offers an opportunity for you to sit down with a certified counselor one-on-one for 45 minutes to an hour to discuss the details of your situation to work out a personalized plan to deal with your debt and get back on track with your finances. Credit counseling services are often run by non-profit organizations, which means that this meeting to recommend your next best steps is usually no cost. Certified counselors are trained in three major areas: consumer credit, money and debt management and budgeting. They can also offer free educational materials and/or workshops on money management, help with setting up a budget and assistance in properly evaluating your finances (including how to get a free credit report.) Generally, the meeting will result in a recommendation to pursue one of several remedies, including debt consolidation, a debt management plan or bankruptcy. The nonprofit may also offer assistance with a debt management plan which might incur a set-up and/or monthly fee. As such, it is important to be certain that you are dealing with a reputable and certified counselor to make sure you are getting the best possible advice. We will discuss the process to find an Arkansas credit counselor who is a good fit in this article. There are any number of nonprofit  credit counseling agencies who offer these services online or over the phone. There are also options to go in person, including Credit Counseling of Arkansas who has offices in Fayetteville, Bentonville and Fort Smith in addition to phone and online services. 

How to Get Free Credit Counseling in Arkansas

It is possible to find reputable free credit counseling in Arkansas by following the five-step process below. This will include suggestions on how to find the right agency, how to make sure they are reputable, what questions to ask to make sure it is a good fit, what to expect and what are the next steps.


Find Arkansas Nonprofit Credit Counseling Agencies

The first important step to finding credit counseling in Arkansas is to find a credit counselor from an Arkansas nonprofit organization that offers the service. The nonprofit distinction is key because you want to find an organization that is designed to help you, rather than a for-profit company that is just looking for their profit. Unfortunately, there are a lot of companies out there who are just looking to take advantage of someone already in a bad situation. Also, simply being designated as “nonprofit” is not enough - some agencies may be hiding fees or pressure their customers in “voluntary” contributions that make the situation worse. As such, you need to be on the lookout for any red flags, such as a charge for the meeting (the first meeting with an Arkansas credit counseling service should be free) or a refusal to send free materials. Luckily some resources can help you get connected to the right nonprofit with a certified credit counselor. If you are looking online it’s a great idea to start with the Federal Trade Commission which applies to the whole United States. They can offer suggestions on how to conduct your search. It’s also important to check that the counseling agency is properly certified by the National Foundation for Credit Counseling or NFCC. You can also check with the Better Business Bureau to find out the rating of an organization and if there have been complaints filed against it.

Information to Research Before Talking to an Arkansas Credit Counseling Agency

Before you set up your meeting with an Arkansas credit counseling agency you should verify that it is accredited as a member agency by the NFCC. To determine with you will want to begin with the Consumer Protection agency for debt relief services from the Arkansas Attorney General. Here you can learn the common red flags to avoid, and how to tell a legitimate organization from a scam. If it sounds too good to be true, chances are it is a scam. Legitimate agencies should focus on helping you manage your money and debts, learn how to create and stick to a budget and offer free financial educational materials and workshops and not push you to choose one debt relief option without explaining why.

Questions to Ask the Arkansas Credit Counselor Before Signing Up

Keep in mind that just because you decide to meet with an Arkansas credit counselor this does not mean that you have to sign up with them. You can (and should) ask about costs before signing up. Your initial session should always be free. There can be legitimate fees for some of the services but it is important to find out what those are before proceeding. If your situation warrants a debt management plan (more on this later) there can be a set-up fee and a monthly fee for the service. Both the fee and the payment should not be more than you can afford. Be wary, however, of an Arkansas credit counseling agency that pushes a debt management plan before a careful review of your finances and does not offer any other resources. You may also want to ask about how long any counseling or plan will be in place. It is always fine (and even encouraged) to request free informational materials - if the consumer credit counseling agency is unable to provide these that can be a big red flag.

What to Expect During Credit Counseling?

You can expect to have a one-on-one meeting with your Arkansas credit counselor that takes up to one hour where the counselor will spend a significant amount of time going over your finances in detail. They will look at your bills and debts, talk about your goals and challenges and work with you to come up with a personal financial plan to manage your finances. This can include debt counseling on how to manage your money and obligations, helping you develop a budget, helping you get a copy of your credit report and score, and discussing additional resources like classes, workshops or possible follow up counseling sessions. At the end of the meeting, they will generally recommend the next steps which could include debt consolidation, a debt management plan or bankruptcy.

What Happens After Credit Counseling in Arkansas?

After you have completed credit counseling in Arkansas with a certified counselor from a reputable agency it is time to move forward with your next steps for your personalized plan to become debt-free. Most often your next step will be one of the following: debt consolidation, a debt management plan or bankruptcy. Below we will discuss each of the options in more detail.

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Arkansas Debt Consolidation

Arkansas debt consolidation involves new credit by taking out one large loan to pay off multiple high-interest debts like credit cards. Debt consolidation can be helpful by paying off your current credit card debt, having a lower interest rate on the new loan, only needing to make one payment debt repayment monthly and still having access to your credit cards. It can be problematic, however, if you do not have a high enough credit score to qualify and/or get a lower interest rate, and this will not address any unhealthy spending habits that may have gotten you there in the first place. Additionally, if you are late or miss payments that will result in additional late fees and possibly a default.

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Arkansas Debt Management Plan

An Arkansas debt management plan is different than a debt consolidation because you’re not taking on new debt. Instead, you receive assistance from an Arkansas credit counseling agency to organize and execute a repayment plan on your existing debt, which can go beyond credit cards and include other obligations like student loans. The Arkansas credit counseling organization can work with your lenders to reduce interest rates and relax fees to get your monthly payment down to a reasonable amount that will work with your budget. They can also work with you to create and manage that budget to reach your financial goals moving forward. 

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Arkansas Bankruptcy

There are situations, however, where neither a debt consolidation nor a debt settlement plan is the right answer and you may instead want to consider bankruptcy counseling. Bankruptcy can offer relief when your debt obligations exceed your income and it is not possible to come up with an affordable payment plan. Bankruptcy can offer an opportunity to walk away from some, or possibly all, of your debts and get a fresh financial start. You can learn more about the various types of bankruptcy and about bankruptcy in Arkansas through Upsolve who can partner with you through the process of filing your own case at no cost

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