Help is available with credit-card debt

Lois Golden

Search the Internet for credit counseling in Michigan, and a bewildering array of options comes back: bankruptcy attorneys, nonprofit organizations, faith-based groups—even a site that plugs ways to avoid credit counseling.

Lois Golden of Rochester Hills decided to try credit counseling. A single homeowner with a daughter in college, she lost her job two years ago. After a decade of fighting with a bank over a high-interest credit-card debt, she turned to the state of Michigan’s Web site for help.

“I’ve always paid my bills,” she said. “I was looking for help, not necessarily handouts.”

Golden found the nonprofit GreenPath Debt Solutions on a list of credit counselors licensed by the state of Michigan. Consultations are free; a fee is charged once a solution has been negotiated and the client signs a payment agreement.
GreenPath was able to renegotiate Golden’s credit-card payments down to a manageable level, something she had been unable to do on her own. Knowing she’s not the only person facing tough financial choices, Golden wanted to let others know that help is available.

“I thought I’m pretty savvy; what are they going to teach me?” she said. “I walked away with just a wealth of information. They are absolutely what they say they are.”

Golden said she didn’t consider bankruptcy. “I feel like most Americans who are in short-term trouble want to maintain their integrity and pay their bills,” she said. “It’s so hard for the consumer when the rules are changed constantly.”

GreenPath’s Jody Kosanke, who worked with Golden, said GreenPath is a member of the National foundation of Credit Counseling, which works with creditors. The company receives contributions from creditors for enrolling customers in a payment program.

“All the credit-card companies have pretty much a predetermined set of terms that they offer,” she said. “We are not a debt settlement company. … We are not getting the creditors to reduce the debt. We’re getting our customers to pay back 100 percent of what they owe with reasonable terms.”

According to a recent bill introduced by Congressman Hanson Clarke of Detroit, nearly half of Americans had credit-card debt in 2009, with a median balance of $3,300. Interest payments alone add up to $94 billion per year.

Attorney General Bill Schuette warns consumers not to be taken in firms offering quick fixes that sound too good to be true. You can’t buy your way to good credit, he says, and no one can legally scrub a bad credit report clean.

On his Web site, Schuette offers these guidelines:

Don’t pay for credit repair services up front. State and federal laws ban payment in advance of services.

Don’t believe a company that says it can remove negative though accurate information in your credit report. Don’t dispute information in your credit report that is accurate and timely. Don’t create a new credit identity by applying for an Employer Identification Number.

In Michigan, consumers have the right to cancel a contract with a credit repair organization for any reason within three business days of signing. Before you sign a contract, a credit repair organization must provide a copy of Consumer Credit File Rights Under State and Federal Law.

For more information visit the Attorney General’s Web site at,4669,7-192-29943_31467-252598–,00.html.

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