If you are in debt trouble, you have probably heard about getting help from debt relief options like credit counseling, debt consolidation, debt management and debt settlement.
Often times, the term “credit counseling” is used in the same sentence as debt settlement, but actually, it’s a completely different process.
With credit counseling, you will actually work with a credit counselor to pay off your debt in smaller, monthly payments that you can afford.
So, do you really need credit counseling to get you out of debt? You need it if you have been receiving harassing phone calls from bill collectors or if you are unable to make another month’s high interest credit card payments.
Before you attend any credit counseling briefing, it’s important that you choose a good credit counseling agency so that you are not scammed.
Look for a reliable credit counseling agency that is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA) or the National Foundation of Credit Counseling (NFCC).
Once you have identified the right credit counseling agency, you’ll have to meet with a certified credit counselor, and provide him with all of the details of your debt.
After a thorough review of your debt, credit history, and a detailed analysis of each of your creditor accounts, your credit counselor will let you know if there is a need for you to enroll in a debt management program.
Once it is determined that signing up with a debt management plan is right for you, your debt management program counselor will negotiate with all of your creditors to reduce interest rates, eliminate late payment fees and lower payments before creating an affordable debt repayment plan that you can live with.
It’s true that working with a credit counseling service can do some damage to your credit report. But if you are at the stage where your last resort is filing for bankruptcy, you would definitely consider a debt management plan in order to avoid bankruptcy or a report full of charge-offs.
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