Are Credit Counseling Services Really a Scam or Do They Help People in Debt?

Ralph Estep Jr.:
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Have you ever found yourself drowning in debt, wondering if credit counseling service are the lifeline you need, or just another scam waiting to sink you further? Well, stay tuned to find out today.

Ralph Estep Jr.:
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In today's episode, we're going to dive deep into the world of credit counseling services. We're going to separate fact from fiction. I'm going to equip you with the knowledge to make informed decisions about your financial well-being. I'm thrilled to have you join me for another episode.

Ralph Estep Jr.:
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Thank you so much for tuning in and making this a part of your day. Before we get started, let's take a moment to reflect on yesterday's episode. Yesterday, we balanced the delicate difference between money and generosity from a biblical perspective.

Ralph Estep Jr.:
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I truly hope it inspired you on how you can make use of your finances to make a positive impact on the world around you.

Ralph Estep Jr.:
00:49

And don't forget tomorrow to tune in, as we tackle the topic of ETFs, and you might be wondering, "Ralph, what are ETFs?" There are mysterious investment vehicles that have been gaining popularity in recent years.

Ralph Estep Jr.:
01:00

We're going to explore them. We're going to talk about what they are and whether they're a safe bet for your hard-earned money.

Ralph Estep Jr.:
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Now, today, I'd like to share a verse from Proverbs chapter 15, verse 22, and it says this. "Without counsel, plans go awry, but in the multitude of counselors they are established."

Ralph Estep Jr.:
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Listen guys. This verse reminds us the importance of seeking wise counsel when making important decisions, especially when it comes to our finances. And that's exactly what we're going to talk about.

Ralph Estep Jr.:
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So, let's dive into today's topic and that's credit counseling services. As someone who has personally struggled with debt in the past, I've been there. I know how overwhelming and isolating it can feel.

Ralph Estep Jr.:
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It is so easy to fall prey to the allure of quick fixes and too-good-to-be-true promises. That's why it's crucial to arm ourselves with knowledge and discernment when considering credit counseling services.

Ralph Estep Jr.:
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Let me lay a truth bomb on you. You didn't get into debt generally overnight, and you're not going to get out of it overnight as well. It's a very simple thing. I'm an overweight guy. Guess how I got there? I got there from eating too much.

Ralph Estep Jr.:
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If you're in debt, guess how you got there. You got there from spending too much.

Ralph Estep Jr.:
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So, let's start first by defining what I'm talking about when it comes to credit counseling services. These are organizations that offer guidance and support to individuals struggling with debt.

Ralph Estep Jr.:
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They can help you create a budget; they can help you negotiate with creditors, and they can help you develop a plan to pay off your debts over time.

Ralph Estep Jr.:
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Sounds really great, doesn't it? Well, here's the catch. Not all credit counseling services are created equal.

Ralph Estep Jr.:
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While there are certainly reputable organizations out there that have helped countless people regain the control of their finances, there are also plenty of scams masquerading as legitimate services. This is one of those areas where you got to do buyer beware.

Ralph Estep Jr.:
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You might ask, "Ralph, how can you tell the difference?" One key indicator is whether the organization is non-profit or for-profit.

Ralph Estep Jr.:
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The truth is non-profit credit counseling services are generally more trustworthy as they're driven by a mission to help people rather than a desire to make money. That's not their focus.

Ralph Estep Jr.:
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They often offer free or low-cost services, and they're required to be transparent about their fees and practices, as with anything else.

Ralph Estep Jr.:
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On the other hand, for-profit credit counseling services may be more interested in their bottom line than your financial well-being. That's what they're in business to do.

Ralph Estep Jr.:
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They might charge high fees, they might put pressure on you to sign up for their services you don't need, or even engage in outright fraud.

Ralph Estep Jr.:
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So, you might say, "Ralph, what are the things to watch out for?" One of the most common scams to watch out for is what they call the "advance fee" scam.

Ralph Estep Jr.:
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This is where a company promises to help you get out of debt, but requires you to pay a large upfront fee before they'll do any work on your behalf. The truth is once they have your money, they disappear.

Ralph Estep Jr.:
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They provide little to no actual assistance. Another red flag is if credit counseling services promise to erase or eliminate your debt completely. You didn't, like I said, you didn't get here overnight.

Ralph Estep Jr.:
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While it's possible to negotiate with creditors and potentially settled debts for less than you owe, nobody, I mean, no one can make your debts disappear entirely. So, you gotta be really wary of organizations that make those claims.

Ralph Estep Jr.:
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Now, let's take a look at some real-life examples of how credit counseling services help people.

Ralph Estep Jr.:
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One of my listeners, her name is Brooke, shared her story with me. She had racked up over $20,000 in credit card debt and was really struggling to make ends meet.

Ralph Estep Jr.:
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She reached out to a non-profit credit counseling service from her church actually, who helped her create a budget. And they negotiated with her creditors to lower her interest rates and her monthly payments.

Ralph Estep Jr.:
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With their guidance and support, Brooke was able to pay off her debt in just over three years. Again, it doesn't happen overnight and it took some real work, but the final destination was the complete repayment of that credit card debt. It is great work, Brooke.

Ralph Estep Jr.:
05:05

Another listener, Mark, well, he had a less positive experience. He signed up for one of those for credit profit counseling services that promised to settle his debt for pennies on the dollar.

Ralph Estep Jr.:
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Listen folks, you get what you pay for. He paid them a huge upfront fee, but after several months, he hadn't seen any progress on his case. When he tried to contact the company, he discovered they'd gone out of business and taken his money with them.

Ralph Estep Jr.:
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Sorry to hear that, Mark. I do hope you've reported that company to the local authorities. See, these stories illustrate the importance of doing your research and choosing a reputable credit counseling service.

Ralph Estep Jr.:
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So here are some actionable steps you can take if you're considering using one of these services.

Ralph Estep Jr.:
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Number one. Check with the National Foundation for Credit Counseling. That's the NFCC, to find a reputable non-profit credit counseling service in your area. You'll find them at nfcc.org.

Ralph Estep Jr.:
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Number two, you've got to be wary of any organization that pressures you to sign up for services or pay large upfront fees. Like we talked about, you didn't get here overnight, just like I didn't get to be a big fat guy overnight.

Ralph Estep Jr.:
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It took years and months of eating and eating. Well, guess what? Debt does the same thing. It took time to build up that debt. And if they pressure you to sign up or just pay this large upfront fee, then you gotta be wary of that.

Ralph Estep Jr.:
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Number three. Ask about fees and get everything in writing before agreeing to work with any credit counseling service. If they're reputable, they're not going to argue with you about putting everything in writing.

Ralph Estep Jr.:
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Number four, don't trust any organization that promises to eliminate your debt completely or guarantees a specific outcome. They can't do it, folks. It really depends on your individual situation.

Ralph Estep Jr.:
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And number five. Keep track of your progress and stay in communication with your credit counselor throughout the process. I'm not picking on Mark.

Ralph Estep Jr.:
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But Mark should have been on top of them right away when he made his payment. And he didn't hear anything from them. You gotta be on those folks right away and watch out for those red flags.

Ralph Estep Jr.:
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By doing your research and taking a cautious approach, you can find the support you need to take control of your finances and truly achieve your goals.

Ralph Estep Jr.:
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So, let's recap. Credit counseling services can be a valuable resource for those struggling with debt, but it's important to choose a reputable organization and watch out for some common scams.

Ralph Estep Jr.:
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If you found this episode helpful, I encourage you to visit our website. That's at askralphpodcast.com and join our email list.

Ralph Estep Jr.:
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you’re going to receive exclusive content, updates on upcoming episodes and valuable resources to help you on your financial journey.

Ralph Estep Jr.:
07:46

Here's a great thing. You'll also be eligible for a complimentary copy of my book. It's called "Mastering Your Finances" just by signing up for our email list.

Ralph Estep Jr.:
07:54

And if you know somebody who's struggling with their finances or who is in debt, do me a favor, share this episode with them and share the program with them.

Ralph Estep Jr.:
08:03

Together, we can spread the message of financial empowerment and truly help others find the path of financial freedom.

Ralph Estep Jr.:
08:10

And don't forget, if you have a question or a topic, you'd like me to address on the show, head over to askralphpodcast.com and submit your questions. This is your show.

Ralph Estep Jr.:
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This show is all about you and helping you navigate the complex world of personal finance from a Christian perspective. I'm here to be your guide, I'm here to be your coach, and I'll be your biggest cheerleader on this journey.

Ralph Estep Jr.:
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Remember, while the road to financial wellness may be long and winding, with faith, with perseverance, and the right guidance ,you too can overcome any obstacle.

Ralph Estep Jr.:
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Until next time, remember this. True wealth is not measured by the size of your bank account, but by the depth of your faith and the richness of your relationships. Take care my friends, stay financially savvy, and God bless you.