Credit Counseling is a Bad Strategy for Your Credit

Most people who seek credit counseling do not have tarnished credit, they just cannot afford carrying over extended debt any further. Instead of seeking legal advice or professional advice from a credit expert or attorney, the consumer seeks a credit counseling company. The credit counseling company will give you the worst advice which is to be intentionally late on your payments. If you do not have a medical hardship or something significantly wrong that happened in your life, there are no reasons to be intentionally late on your monthly payments. 

The Inability to Get Financed

Credit counseling ruins your chances of obtaining a business loan.  If a business owner is misled by a credit counseling company and says they would consolidate to reduce the debt, they are false. The first thing a credit counseling company requires a business owner to do is ask the consumer to stop paying the monthly payments and become delinquent on all the personal credit cards and sometimes personal loans. 

For example: A client who is a business owner sought some type of debt relief, he decided to contact a credit counseling company. He should have contacted his CPA for a professional referral before entering into any debt consolidation programs. The credit counseling company misadvised him with the worst credit advice. My client had a 750 credit score before entering the credit counseling program, but wanted to consolidate his credit card debt.  The credit counseling company heard my client’s concern, they desperately wanted to sell the program instead, even though it was damaging to my client. They required my client to become delinquent so they can have some type of strategy to settle his debt, which later the false strategy destroyed his credit scores instead. 

Currently, this client cannot finance his business because of what horrible strategy the credit counseling provided him, wanting to sell the program was more important than the my client,  who now has permanent damage on his credit. A a result, his partner took the full liability to quickly correct the mistakes of the credit counseling company, the partner now carries the new business loan himself that was needed for the company. 

If you can’t settle and pay off your debt it is recommended to file for Chapter 7 or Chapter 13  with a reputable Bankruptcy attorney rather than hiring a credit counseling company. Get referred to a reputable bankruptcy attorney. Keep in mind, with the revised bankruptcy laws, you must prove you are unable to pay off the debt. 

If you are able to settle and payoff the distressed debt, it is not necessary to file for bankruptcy. 

For more information on how we can locally help you fix your personal credit and business credit in Naples FL and Marco Island FL, please fill out the online contact form about your concerns or give us a call at 855.477.9007, we are local Floridians. Read what our valued clients have to say about First Pro Capital on our Testimonials page.

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