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Common Questions

What are the pros and cons of using a CCCS?

Pros of Using a CCCS

  • Monthly bills are conveniently paid for you.
  • You only make one low monthly payment.
  • Credit Counselors will negotiate with creditors to reduce interest rates and monthly payments.
  • Credit Counselors will generally get creditors to waive late and over-the-limit fees.
  • As mediators between you and your creditors, harassing collection calls and notices will stop.
  • Provides immediate relief.
  • Better than bankruptcy.

Cons of Using a CCCS

  • You are still obligated to pay back the full balance on all of your debt.
  • It will take substantially longer to pay off your balances, generally 4-7 years.
  • Although lower, you are still being charged interest on all of your accounts.
  • You are restricted from using credit while enrolled in a CCCS plan.
  • An 8% to 25% commission fee will be charged on the money they "save you" in the end (you could have applied their commission to your actual debts instead).
  • They typically charge exorbitant set-up fees (or "donation" fees if the CCCS claims to be a non-profit).
  • The debt relief is only temporary and will end up costing you more in the long run.

Remember, the only time you should consider using a CCCS is when your financial situation continues to spiral downward, despite other attempts at resolution. You should be nearly bankrupt before considering hiring a third party to handle your debts for you.

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