If you have several credit card balances that you have to repay and you are not certain about which debt relief option you should use, Maryland credit counseling is for you.
Written by the Upsolve Team.
Updated November 30, 2019
Credit counseling in Maryland is a process that helps people with debt through budgeting, education, money management, and the use of a variety of tools and strategies with the aim of reducing and ultimately eliminating debt. Consumer credit counseling services in Maryland are not a debt solution in and of itself. Rather, a Maryland credit counseling service helps you identify the most suitable debt solution for your needs.
Maryland credit counselors discuss and analyze your financial situation and help you come up with a personalized plan to solve your financial problems. A Maryland credit counseling session usually lasts 45 to 60 minutes. During your credit counseling in Maryland, you will receive guidance on several matters, such as consumer credit, budgeting, and debt and money management.
You should also know the difference between Maryland credit counseling and debt settlement. Credit counseling in Maryland is providing financial education and money management tips to help you better manage your personal finances and credit. Debt settlement, in contrast, usually is negotiating a lower balance with your creditors and lenders, which often results in your accounts being reported as settled for comparatively less than originally agreed. Note that accounts reported as settled are often scored negatively by all credit scoring models.
Be wary of companies that compel you to enter debt settlement programs. They often charge high up-front fees for their services, promising to remove negative information from your credit reports.
You are a suitable candidate for Maryland credit counseling if:
You would like to benefit from a lower monthly payment. A debt management plan, on average, can lower your total credit card payments by up to thirty percent.
You are having trouble juggling multiple accounts. Credit counseling in Maryland helps you find the best way to consolidate all your debts into a single monthly payment.
You do not want to deal with debt collectors.
How to Get Free Credit Counseling in Maryland?
Follow these five simple steps to get the debt relief you need by getting free credit counseling in Maryland.
Find Maryland Nonprofit Credit Counseling Agencies
We know that debt can be overwhelming, but don’t worry as help is available. However, it is vital to find the right help, and this is why you must know the difference between a for-profit and nonprofit credit counseling agency in Maryland.
The best place to get help dealing with insurmountable debt is a non-profit credit counseling organization. Reputable nonprofit Maryland credit counseling agencies are more likely to offer credit counselors who are both certified and trained in debt management, consumer credit, and other financial matters, such as student loans. Their initial credit counseling session is also free. On the other hand, for-profit credit counseling companies usually are in business to make a profit, instead of helping people better manage their financial matters.
Most nonprofit and certified counseling agencies in Maryland are members of either the Financial Counseling Association of America or the National Foundation for Credit Counseling. A non-profit credit counselor in Maryland will work closely with you to help you figure out the reason you got into debt in the first place and how to develop sound financial habits.
Information to Research Before Talking to a Maryland Credit Counseling Agency
Free service is not the sole reason to choose a specific Maryland credit counseling agency. There are some signs you can search for that will help you find a competent and reputable Maryland credit counselor. Make sure the Maryland credit counseling organization you are considering is a member of one or more national organizations, like the Financial Counseling Association of America and the National Federation for Credit Counseling, and has also fulfilled state requirements for Maryland credit counseling, such as compliance with the requirements of the Maryland Division of Financial Regulation. This includes having a Certificate of Authority to do business within Maryland.
Even if a Maryland credit counseling agency is accredited, you should check its local record with the state attorney general, Better Business Bureau, and various local consumer protection groups that receive and examine consumer complaints. Here are a few other key indicators of a reliable Maryland credit counseling agency.
Make sure the counseling agency in Maryland is charging you reasonable fees or, if you can’t afford to pay the fees, assists you free of charge
The counseling agency should provide you with a comprehensive written budget
The credit counselors at the counseling organization should be certified by a competent and independent organization
Questions to Ask the Maryland Credit Counselor Before Signing Up
If you’re considering a Maryland credit counseling organization, it is better to interview them regarding how they operate before they quiz you about your personal finances. Compare the answers they give you to what you received from other Maryland credit counseling agencies. It is worth noting that the more forthcoming an agency is with the answers to the questions you have, the more confident you will be in their willingness and ability to see you through the tedious process of eliminating or reducing debt.
Some of the pertinent questions you should ask include the following:
Do you provide help with budgeting?
Are your Maryland credit counselors certified?
Is the credit counseling agency licensed in Maryland?
How are your Maryland credit counselors compensated?
What to Expect During Credit Counseling?
Most nonprofit Maryland credit counseling organizations offer credit counseling by phone, online, or in person. During your counseling session, a Maryland credit counselor will review your complete financial picture, including bills, income, debt and various other obligations, like child support and alimony. After taking all this information into consideration, the Maryland credit counselor will help you determine a financial plan to deal with your debt. The credit counselor may also help you create a realistic household budget.
To streamline the counseling process, you should prepare by arranging your financial documents. First, you should consider all your income sources. Some sources of income can be money received from salary checks, social security, rent, and child support. Also, consider where you are spending your money, such as food, clothing, and utilities. Finally, think about your main financial goals, which should be flexible and reasonable.
Your Maryland credit counselor will start your counseling session by reviewing your current financial situation, including:
They will also pull and review your credit report. However, do not worry as it won’t affect your credit-worthiness.
What Happens After Credit Counseling in Maryland?
A Maryland credit counselor might suggest a debt consolidation plan or a debt management plan to help you get out of debt faster. The plan of action will depend on your financial situation.
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Maryland Debt Consolidation
A debt consolidation loan in Maryland pays off your current debts by combining those balances into one monthly bill that has a new interest rate. The main goal of debt consolidation is to lower the number of bills that you have to keep track of and make things easier to manage.
Maryland Debt Management Plan
Under a Maryland debt management plan (DMP), your Maryland credit counselor will save you the hassle of juggling multiple bills by combining your debt into one monthly payment that they then distribute to your creditors, typically at a lower interest rate than what you’re currently paying.