May I please suggest that you be careful about making it sound like all CCCSs are alike before you go busting chops on them? I have a close relative who is the chief of the IT department at one of them. He makes far less than IT professionals do in his area and nowhere near the amount you quoted. He is the second highest paid in that CCCS.
They are losing money because several cutthroat companies have undercut their percentage. For those who do not know, CCCS’ have agreements with the major lending companies to collect a small percentage of each payment they collect from you and send to them. This usually amounts to anywhere from 1-5%.
This particular CCCS has over 2 dozen locations covering half a particular state. The reason I will not give more details is to prevent any repercussions to my relative.
You are correct that some companies will not deal with a CCCS and even if they do, does not mean that they will work favorably. Legitimate CCCSs make their money from the lending companies, not from the consumers.
I do not recommend writing off ever using a CCCS; they may be an option. You must evaluate what they can do for you along with all options. We looked into using a CCCS once, but live in a different state than my relative. The counselor was straight up with us and told us they could not help us; we already had the lowest interest rates possible. He suggested Crown Ministries to learn more about budgeting. We never did get into one.
I did not intend for this to be a novel, but not all used car salesmen are crooks and not all CCCS centers are either. I also do not wish to start some kind of dispute.
While you are correct that you can’t paint all of the employee’s of all credit counseling services with one brush; I think we as a group of people concerned with helping other people get out of debt can paint all companies with one broad brush.
CCS are not in business for your welfare, they are in business to make money. That’s why they exist.
I guarantee that no business will lose money for the sake of their customers, at least not for long. That’s how you go *out* of business.
Your relative is surely a great guy but it’s not like he works for the Shriner’s Hospital.
I do agree that you bring up some good points, not all CCCS are bad. And I do think they serve a purpose.
I would recommend a CCCS under these conditions ONLY:
- That you have a debt of $15,000 or less
- That you only need a short term relief like 6 mos, never more than a year.
- You are single and rent your home (including the above two points).
- Can easily afford minimum payments plus a little bit more.
I have recommended CCCs to people where they need it. But the fact is that if you own your own home and can afford a CCC then you don’t need one.
You can get a better and far cheaper service without the CCCS.
The CCCS do not have the purpose of getting one out of debt, there purpose is to collect the money for the banks before one gets to overwhelmed and has to file for bankruptcy. That was there intent when they were created by the banks, and that is still their intent.
So if you fall under all or one of the categories then do a CCCS, but if you don’t then they will be no good for you.