Secured Debt Credit Counseling

The importance of secured debt credit counseling is perhaps the backbone of all counseling programs. For most people, their most important assets (homes, cars, appliances, recreational vehicles) are covered by security agreements and represent a large portion of net worth. Before selecting any counseling firm, always request a written free quote, debt negotiation options, and a written draft of the proposed guarantee of services. The best time to obtain debt negotiation advice is before signing a retainer agreement. Also, just as importantly, discuss the current status of secured property and the likelihood of foreclosure if payments are not made, payments are brought current, or a credit counseling firm intervenes. In most cases, the appearance of a credit counselor is considered highly desirable by secured creditors.

After You Begin

Once you retain a credit counselor, you should receive copies of all correspondence, especially including letter agreements that set forth the terms of all reductions and settlements. A sample settlement of debt letter will also include an explanation of what happens if either party fails to perform as agreed. Most often, when a workout agreement covering secured property is breeched, bankruptcy help, advice regarding legal rights and the foreclosure process, is necessary to avoid unnecessary losses and liability.

The key to success in all credit counseling programs is consistent application of solid money management techniques. Presumptively, financial recovery is the result of improved financial decisions. For most people, once understanding the cause of financial strain, implementation of a profitable solution is rather easy.