What Types Of Services Can You Receive At A Consumer Finance Center?
Different consumer finance centers offer different services. However, most offer options for dealing with burdensome debt, securing mortgage loans, and creating and managing a sustainable budget. Some centers may also offer low cost tax preparation services.
Many financial guidance centers offer classes or counseling that are mandated in order to qualify for government subsidized programs or to satisfy legal requirements for bankruptcy filings.
All of them offer individuals a chance to make a fresh start and to change or enhance their lives. The following services are examples of those provided by consumer credit counseling service centers.
Home mortgage counseling services
These services provide access to lower cost mortgages for first time home buyers or those with credit or other qualification issues. Mortgage assistance may be provided by local municipalities offering below market rates and down payment assistance to entice new homeowners (and potential taxpayers) to buy homes in challenged areas of their cities.
Loans may also be provided by commercial lenders who have special programs for low income borrowers or those with credit challenges.
Both of these types of loans may require receiving mandatory credit and budget counseling as a condition for qualifying for these programs.
Debt consolidation and bankruptcy services
While these consumer fiance centers don't loan money to consolidate debts, or offer legal services for bankruptcy filings, they provide valuable assistance in relieving those who are experiencing serious financial difficulties.
Debt consolidation
Consumer credit counseling service providers will arrange agreements with creditors that allow a borrower to make payments through the counseling provider. The borrower will provide a list of all unsecured debt and creditors to the counseling service, and the service will contact the creditors to try to get concessions such as waivers of late fees and lower interest of outstanding loans.
When an agreement is reached with every creditor, the borrower will enter a program through which they make a single payment each month to the counseling service, who then distributes the payments among the creditors until all debts are eventually repaid.
Secured debts, such as home and car loans, are not included in this service, and must be paid by the debtor to keep the property.
Bankruptcy counseling
Federal law mandates that debtors attend two counseling sessions when filing bankruptcy. One session must be completed before proceedings begin, and includes information about the procedures and effects of filing for bankruptcy. An exit class on maintaining a budget and controlling spending habits must also be completed before the case can be settled and the debts discharged in bankruptcy court.
Consumer credit counseling providers can also design a repayment plan that is based on the debtor's income and their debts. This plan may be used in a Chapter 13 bankruptcy case, in which a creditor repays creditors over a period of 3 to 5 years, based on income.
Payments may be substantially less than the actual amounts owed, but within the debtor's ability to repay. A court appointed trustee will evaluate the plan and implement it if it is approved by the bankruptcy judge.
You can always go to a credit counseling center just to learn methods of staying within a budget and saving money. If you can do these things effectively, there is no need for the intermediary services that these centers provide to those who have financial or credit issues that need remediation.