If you’re struggling with debt and unsure where to turn, know that there are resources available to help you get back on track. At Bank On Greater Milwaukee, we encourage you to seek help from trusted resources to ensure you’re receiving accurate and trustworthy advice.
Consider working with a credit counselor, who can advise you on ways to manage your money and debt and help you create and follow a budget. You can find a credit counselor through organizations such as the Financial Counseling Association of America or the National Foundation for Credit Counseling. They offer various services, including certified credit counseling, debt management plans, bankruptcy counseling, housing counseling, and more. Be sure to research and compare your options to find the best fit for your needs. Be sure to check the organization with your state’s attorney general or local consumer protection agency before proceeding.
Credit counselors can offer free educational materials, review your budget, help you decide which debts to pay first, and develop a debt management plan. They can also make an up-front agreement with your creditors to stop collections and not charge you late fees while you’re in a debt management program. However, credit counselors typically don’t try to reduce the amount of debt you owe.
Debt settlement companies, on the other hand, often claim they can make a deal with your creditors to reduce the amount of debt you owe. Beware of companies that charge up-front fees, as this is illegal for most debt settlement companies. Dealing with debt settlement companies can be risky and may result in more debt than when you started. You should avoid doing business with any debt settlement company that charges fees before settling your debts, tells you to stop communicating with your creditors, or guarantees it can make your debt go away.
Remember, paying off debt can be a long journey, but there are steps you can take to achieve your financial goals. Seek help from certified accounts and certified banks, work with a credit counselor, and be cautious when dealing with debt settlement companies. With the right resources and support, you can take control of your finances and improve your financial well-being.
Here are 5 steps to take to begin your debt relief plan:
Assess your debts: Start by making a list of all your debts, including the creditor’s name, the outstanding balance, the minimum payment, and the interest rate. This will help you understand the full scope of your debt and prioritize which debts to tackle first.
Create a budget: A budget can help you manage your finances and prioritize your spending. Calculate your monthly income and expenses, including your minimum debt payments, and look for areas where you can cut back on spending.
Contact your creditors: Reach out to your creditors to discuss your options. Many creditors offer hardship programs or payment plans that can help you manage your debt.
Consider debt consolidation: Consolidating your debt can simplify your payments and potentially lower your interest rates. Consider a debt consolidation loan or a balance transfer credit card.
Seek help: Don’t be afraid to seek help from a trusted organization. They can provide personalized guidance and support to help you develop a debt relief plan that works for you.
Learn More with Money Smart Week®: April 15-21, 2023
Hosted each year, this national public education program is coordinated by the Federal Reserve Bank of Chicago and empowers people with the knowledge and skills to make better-informed personal financial decisions.
Attend one of the events to learn more about the topics below:
- Monday, April 17 @ 1:00 p.m. CT | Family Budgeting. Presented by Katie Cullum of the University of Arkansas System, Division of Agriculture
- Tuesday, April 18 @ 1:00 p.m. CT | Spanish language session: Instituciones Financieras. Presented by Vanessa Arita Reyes of the Washington State Department of Financial Institutions
- Wednesday, April 19 @ 1:00 p.m. CT | Debt Relief. Presented by Bruce McCleary of the National Foundation for Credit Counseling
- Thursday, April 20 @ 1:00 p.m. CT | Employer Retirement Plans. Presented by Kimberly Johnson of the U.S. Department of Labor, Employee Benefits Security Administration
View more details at www.moneysmartweek.org. Events are free and open to the public, but registration is advised. Questions for the panelists can be submitted during the registration process.
During the week of April 15-21, 2023, Bank On Greater Milwaukee joins the Governor’s Council on Financial Literacy and Capability and the WI Department of Financial Institutions (DFI) in celebrating Money Smart Week, a financial literacy awareness and education campaign (learn more here). We’re featuring posts with tips and resources on teaching kids about money, certified accounts, debt relief, employer retirement plans, and 529 savings plan.