Debt

Listen Up!

Why should you “Pay It Down?” Last week I took part in Portfolio’s “Business Beat” podcast to answer that very question and talk about the new, credit crunch edition of “Pay It Down!”. Listen in on the interview below for my answer.

Debt Diet: New Tools to Help You Pay it Down

About a week and a half ago, I released a new version of my best-selling book, Pay it Down!  The updated version still includes my tried-and-true Rx for getting out of debt on $10 a day, but it also takes into account the changing times, including the CARD Act of 2009, a tighter credit market, and your tighter wallet.  Even if you’ve read it before, there’s enough new that you may want to think about reading it again.

But I also took it a step further, and developed an online program, Debt Diet Online, that launches today on this website.   More…

Doing Away With Debt

This morning on the fourth hour of Today, I was joined by the Hildebrandts, a couple that was able to pay off around $123,000 worth of debt. Watch the video below to hear how they did it.

Ask Jean Thursday: Help From the NFCC

I have heard you mention credit counseling through the NFCC. There is an agency in my hometown. Can you tell me what kind of help they can give my husband and me? We have a large amount of credit card debt as well as equity line debt. We are paying our bills on time but can only pay minimums. Do they negotiate with the credit card companies on our behalf?

-Lisa, Alabama

Every year the NFCC assists over 3.2 million people who are struggling with their finances. For over 50 years, NFCC member agencies have offered free or low cost services (whether or not you’ll be charged for the help they provide depends on the member agency and the laws in your state) to those wanting to take control of their debt. The NFCC offers confidential help via phone (through their national toll-free hotline), online or in person.

Through credit counseling, the NFCC can help you to work towards paying more than the minimum amount on your bills. During a session, your counselor will address your credit issues and help you find ways to work towards solutions. “Adjusting the budget, decreasing spending and increasing income would be ways to find extra money to pay more than the minimum and get out of deep incredibly sooner,” says the NFCC’s Vice President of Communications Gail Cunningham.

If you’d like the NFCC to negotiate with creditors on your behalf, they can do that through a Debt Management Plan, or it’s commonly known, a DMP. A DMP is essentially a plan to help More…

Ask Jean Thursday: Credit Counseling

I am curious about consumer credit counseling. Can you tell me how it affects your credit? Is it as bad as filing bankruptcy?

-Kelly, Oldsmar Florida

You’re right-using consumer credit counseling to manage your debts can potentially affect your credit score. What may surprise you, however, is the fact that when your score is calculated using the FICO scoring model, whether or not you’ve received counseling won’t affect your score. “Any notation on a consumer credit report indicating that the consumer is or has been involved in credit counseling is ignored by the FICO scoring model,” says CardRatings.com’s Curtis Arnold.

However, what you do with the advice you get from your consumer credit counselor is another matter. For example, if a counselor advises you to manage your debt or credit cards a certain way, and you follow through with that advice, it could potentially have a negative impact on your score.

One thing is for certain though; getting credit counseling will have much less of a negative impact on your credit than bankruptcy will. “The negative impact of credit counseling is fairly minimal, whereas a bankruptcy has HUGE negative implications. For example, according to Credit Counseling of Arkansas, your score can drop as much as 100 points if you file bankruptcy,” adds Arnold.

If you decide to move forward with credit counseling, a good way to start looking for help is through the National Foundation for Credit Counseling. The NFCC is a national, nonprofit network of counselors whose mission is to help you get out of debt. Through the NFCC, counseling is available by phone, online or More…