The National Foundation for Credit Counseling

As the nation’s largest credit counseling for single parents organization, the National Foundation for Credit Counseling (NFCC) Member Agency Network includes over 800 community-based offices located in fifty states. In 2010, 3.2 million consumers received financial counseling and education from NFCC Member Agencies in person, on the phone, or online. With people spending more than they have, and credit cards maxed out and leading to debt, the NFCC and its member agencies are a great help to those who need help, particularly for single mothers who sometimes struggle from month to month to make ends meet. The NFCC is a national non-profit network of nearly 850 locations and offers a range of services to help you become debt-free and in control of your financial future. Specific services include money and credit management education, confidential budget, credit and debt counseling, Debt Management Plans (DMP), bankruptcy counseling and education, mortgage delinquency counseling, and homebuyer education.

Benefits of Credit Counseling For Single Parents

With services administered by certified consumer credit counselors who must meet high quality and eligibility standards and pass third party counselor certification exams, these people are experts with the ability to tailor confidential programs to meet your specific needs as a single parent. They will apprise you of your situation so you can rise above the mire you are in and get on the road to financial freedom. Credit counseling for single parents is available in person, by mail, online, or via their national toll free hotline at 1-800-388-2227. You will be informed of any information you need for the credit counseling for single parents session and will be able to gather your financial documents and other relevant information and receive professional help in person, online, by phone, or by mail.

What you need to know about the NFCC

  • NFCC agencies are funded through a variety of sources including voluntary contributions from creditors who participate in the Debt Management Plans (DMP), local grants from private sources and foundations, and client fees and contributions. Depending on the support for each member and state laws, the majority of the services are provided at no or low cost to clients.
  • A question often asked is why the creditors will reduce payments through the NFCC instead of working directly with them. The answer is that each member agency employs independently certified consumer credit counselors who evaluate your overall financial situation. Because they assist you with coming up with realistic options to address your particular financial problem, creditors will work with them, and through the agency, with you.

The counseling session with a certified consumer credit counselor

What happens at this session is that the counselor will review your financial situation in a non-judgmental way, and provide possible solutions. The counselor will help you develop a spending plan that covers your living expenses, as well as payments to your creditors. Credit counselling for single moms is confidential and the counselors do not discuss the client’s financial situation with other parties. Records of clients are kept in secure facilities. Counselors working for the NFCC are professionals in their field, and becoming a Certified Consumer Credit Counselor requires an understanding of the theories, principles, issues, counseling techniques, and forms that are applicable to credit counseling for single parents and financial counseling.

The required subjects are:

  1. Basic Counseling Principles
  2. Budgeting
  3. Credit
  4. Collections, Debt Management
  5. Consumer Rights, Responsibilities
  6. Bankruptcy. As far as giving a legal opinion, only an attorney can do that.

How to establish credit as a single parent

  • To establish credit you need a job and a steady work record, as well as continued residence at the same address. If you do not have a checking account, open one and be careful not to write checks when there’s no money in your account. You don’t want to bounce a check if you want to establish credit.
  • You can also apply for credit at a local department store or credit union. In your situation you should opt for a secured credit card which means that you require money to deposit for the charges you make on the card.
  • Get a copy of your credit report by contacting the
  • Credit Counseling for Single Parents three major reporting agencies. Go online to obtain free copies of your credit report. Remember, that if negative comments on your credit card are indeed the truth that they can remain in your file for up to seven years, except for bankruptcy which can remain in your file for up to ten years. If you believe that there are errors in your credit report, you may notify the credit bureau in writing. If the creditor agrees that you are right, your report will be changed.

Pros and cons of utilizing a Debt Management Plan

  • A debt management plan (DMP) sets up a payment schedule for you to repay your debts, by which you voluntarily agree to deposit funds with your credit counseling for single parents agency each month. The agency sends the funds directly to your creditors. If your collectors call, you can refer them to the (DMP). If you have bad credit, but you have completed your payments, they will assist you in re-establishing your credit. The DMP serves the dual role of helping you repay your debt, and helping creditors receive the money owed to them.
  • Be advised that a DMP will affect your credit in that your participation in a DMP may change information that is already on your credit report. If it reflects that you have paid creditors as agreed in the past, a DMP could have a negative impact on a credit-worthiness decision by a potential creditor such as a landlord or an employer as it is an indicator that you have experienced financial difficulties in the past. As well, creditors may report that you are on a DMP and not paying as originally agreed upon. Creditors have different rating policies and a certified counselor can answer your questions about the possible effect on your credit rating. The goal of the DMP, however, is to develop a plan to eventually improve your financial and credit standing.
  • If you enroll in a DMP, you cannot as a rule continue to use your credit cards. Your creditors will close or suspend your line of credit. If in the event you have to travel for an employer, one credit card may be maintained.
  • When you complete the DMP,some creditors will re-establish your credit based on your current ability to pay, and your payment history while enrolled in the plan.
  • Your Certified Consumer Credit Counselor will be able to tell you if any of your creditors will consider stopping interest charges while you are on the plan. However, the majority does not, but some may lower interest. All debt needs to be included in your DMP.

Debt Collection Practices

If you haven’t heard of the Fair Debt Collection Practices Act (FDCPA), it is a federal law that protects consumers from harassment or threats made by creditors. It further prohibits creditors from making false statements about you.This law also prohibits a debt collector from disclosing what you owe. Only your attorney needs to know this. Some of these practices include the following:

  • When an account is deemed uncollectible, a creditor will write it off as a bad debt or a charge-off. Depending on the creditor’s policy, a charge-off will occur between 90 and 180 days after you have become delinquent. That doesn’t mean that the creditor can’t pursue it. He can still pursue collection of the debt after a charge-off, and it will also be reported to the credit bureaus. An example is if a car was repossessed and resold, you will still be held liable for the difference between what the car was sold for and what was owed. The creditor can initiate legal action for the difference.
  • When there’s a court judgment – a decision issued by the court at the end of a lawsuit – if you are sued and don’t file papers, the person who sued you will get a judgment. Most creditors need a judgment to attach your wages or put a lien on your property.
  • When your wages are attached or garnished, a sum of money is deducted from your paycheck and sent to the creditor. Wage attachments are a common method used to collect on a court judgment or overdue child support. With single parents and single moms struggling to survive month to month, garnishing wages is the right thing to do.

Bankruptcy Practices

  1. In the unlikely event that you will go bankrupt and are starting to fear that your possessions will be taken from you and that you will end up in the street, below are some questions as to whether one needs an attorney to file bankruptcy and whether there are less expensive alternatives to hiring an attorney. The answer is that you are not required to be represented by one, but that the advice of an attorney will greatly help in understanding your rights and the consequences of your bankruptcy case, particularly in light of the recent changes to bankruptcy law. If you decide to file a Chapter 7 or Chapter 13 bankruptcy case, the advice and assistance of an experienced attorney is a worthwhile expense.
  2. As to the second question, yes, there are less expensive alternatives in the nature of bankruptcy petition preparers who offer services in some areas of the country or over the internet, but although their fees are usually lower than those of attorneys, they are generally not attorneys and therefore not permitted to give legal advice or even to represent you in court. If you are a person with limited means, or a single mom who is struggling, in some states or cities you might be able to obtain the services of an attorney who will represent you without charge on a pro bono basis through a legal aid bureau or local bar association.
  3. You can keep your credit cards after filing if the issuer of the cards agree. Some issuers permit you to keep your account if you reaffirm payment of your debt to the issuer. There may be other alternatives such as secured or guaranteed payment cards which function more like debit than credit cards.
  4. As to whether you can be fired for declaring bankruptcy, The Bankruptcy Code generally prohibits termination of employment or discrimination with respect to employment solely because an individual has filed a bankruptcy case, (2) has been insolvent, and (3) has not paid a discharged debt.

Practical tips for saving

Do you find yourself struggling during these hard economic times we are currently experiencing? Do you get paid with the left hand and with the right hand it all goes out to pay bills? You are not alone. Everyone is experiencing the crunch. The problem is that there is no money to save. Here are some practical tips:

  • The first thing is to track your expenses. To find available money, you have to determine where you’ve spent it. What are you spending it on? Make a note of every dollar spent, and where; you might be surprised.
  • Create a budget with living expenses, fixed expenses such as mortgage, auto and rental expenses. Don’t forget variable expenses like credit cards, groceries, entertainment, clothes, gasoline, dental and medical payments, and home and car maintenance. Set aside some money for yourself, and save it.
  • Customize your budget. Cut back as opposed to cutting out. You don’t want to be miserable, so think of yourself. Don’t be too strict, or you won’t stick with the plan. This is similar to one who wants to lose weight, goes head-first and heavy into dieting, then finds it too taxing, and quits. You don’t want to do this. Instead of buying lunch five days a week, brown-bag it for two days or three. Small amounts add up. Ask yourself whether you need a landline in addition to the Blackberry you already have.
  • Involve the family in your plan. A joint effort always works much better.
  • Find the right savings vehicle; one that you won’t dip into unless in an emergency.