CCCS is the abbreviation for Consumer Credit Counseling Services. Agencies providing these services are non-profit organizations. Their aim is to help people and provide them guidance on Consumer credit, budgeting and managing debt. The Credit Counseling Services comes under the National Foundation for Credit Counseling.
NFCC was first established in the year 1951, to aware and educate more and more people regarding finance management. The main purpose of this Counseling was to promote the usage of Credit cards. And also to make people understand why Credit cards are necessary. Later, NFCC launched the non-profit Credit Counseling, CCCS, for those who got their first credit cards. Individual CCCS organizations are meant to provide free services to people who need guidance on managing their financial situations.
How do Consumer Credit Counseling Services work?
The main motive of Credit Counseling Services is to help people manage their hard-earned money in a proper way. This is to make sure that all their debts are cleared and they do not face bankruptcy.
For that, these Credit Counseling Organisations have specifically trained and experienced counselors who guide their clients regarding their financial matters. These staff counselors are certified in their fields to provide every client with proper financial advice according to their needs.
These organizations also offer services like personalized plans regarding money and debt management. Each client is given one to one counseling sessions to discuss all these plans and generally, each session lasts up to an hour. After the initial sessions are over, they make the final deal with the clients who opted for their services.
Are all Consumers Credit Counseling Services Free?
Most of the Consumer Credit Counseling Services are free as they are non-profit organizations under NFCC. However, some of these Credit Counseling service providers left the NFCC organization. Therefore, those independent agencies do not get the funds they were getting from public donations, client fees and creditor contributions earlier. Hence, these organizations are running their business as an independent agency.
How to find a good Credit Counseling Company?
The Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit takes out a list every year of all the legitimate and legal Credit Counseling services across the country. So it becomes easy for the people to choose the best Credit Counseling Company from that list according to their needs. Also, the clients can double-check the legitimacy of any counseling service from the Local Consumer Protection Agency and the State Attorney General’s office. Furthermore, the United States Trustee Program maintains a list of credit counseling agencies that are eligible to provide pre-bankruptcy counseling.
DMP Plan of CCCS
According to the Bankruptcy law, anyone who is filing for bankruptcy needs to undergo Credit counseling first. If a client is bankrupt due to unpaid debts and poor management of finance, then Consumer Credit Counseling agencies would recommend that particular client to undergo DMP (Debt Management Plan). A staff counselor from the agency will make a complete financial growth plan for the client keeping their situation and needs in mind. And he will also offer them customized money management advice.
Under this Debt Management Plan, each month the client will deposit a particular amount into the credit counseling account. After you deposit a certain amount into that account, the credit counseling organization uses it to pay the unsecured debts of the clients. These unsecured debts can be credit card bills, medical bills, and student loans. A complete schedule made by the counseling organization and the client together is maintained in order to make all the debt payments on particular dates.
Usually, the loan creditors decide their own interest rate and debt payment schedule. But if you are under the Debt Manage Plan of a Credit counseling agency, then the staff counselors of the organization will become a mediator between the creditor and its clients in order to negotiate the interest rates and duration.
It usually takes 48 months or more to complete a Debt Management Plan. And during that period, it is mandatory to deposit money regularly into the account within the Consumer Credit Counseling organization.