Do you deal with your credit card debt all by yourself or through a credit counseling agency? As for me, I use AKPK (Agensi Kauseling dan Pengurusan Kredit) to manage my credit card debt. In fact, I have been in the debt management program since October 2008.

Read: AKPK Debt Management Program – Part 1.

Read: AKPK Debt Management Program Part 2.

Read: Back Then in 2008 and Now 2010 for AKPK Debt Management Program Application.

There can be various reasons why people choose to go for a credit counseling and debt management agency.

Some feel that they are not comfortable in dealing with credit card debt by themselves, so they let a credit counselor handle it for them. Some go for a credit counselling and debt management agency because they lack of time to do the research and evaluate options for credit card debt settlement. Others just want professional advice and hence they contact credit card debt management agency.

Whatever be the reason for using a credit counseling agency, a good credit card debt management agency would surely be of help.

However, it’s important that you select a good credit counseling and debt settlement agency.

Never Fall for Ads of Credit Card Debt Management Agencies That Promise to Wipe Off Your Debt Overnight!

No Credit Card Debt Settlement Agency or Anyone Else Can Do That!

You should select a credit counseling and debt settlement agency which has verifiable credentials or a company that you know has a good reputation. If some friends have been through this process previously, they might be able to recommend a reliable credit counseling and debt management  agency to you.

Once you find a reputable credit card debt management agency, be honest with your credit counselor about your debt or/and debt-related information no matter how bad your debt is.

It is important to note that no credit counseling and debt management agency will be able to help you if you are not ready to help yourself. So, follow the advice given by your credit card debt counselor and practice good spending habits.

I have about $25,000 of debt but can still pay monthly payments on time and have never missed a payment.

If I try to get a personal loan as opposed to a debt management program, which looks better to creditors?? My credit score is around 650-670. I am thinking of going to a non-profit credit counseling agency to see what they think.

I still have some stocks and bonds totaling $6,000. I do get paid consistently and have been trying some internet surveys to make some small money on the side to my job.

What things should I look for at the credit counseling agency?

Wow, it’s been a year since I started making monthly debt repayment to AKPK! You know, I have also been able to save extra money in my personal savings account as emergency fund due to the debt management plan.

A debt management program is one of the many debt relief options that a credit counselor might suggest when you’re having issues with credit card debt.

It is also a good option if you don’t want to apply for a debt consolidation loan or declare bankruptcy.

Okay, let’s see some of the benefits of enrolling in a debt management program.

1. Reduced Interest Rates. Once enrolled in a DMP, your credit counselor will negotiate with your creditors to reduce your interest rates.

Interest rates will vary depending on your situation and your creditors, most rates are between 2% to 9% and under certain circumstances, some creditors may completely eliminate their interest rate to 0% interest.

2. One Single Payment. Instead of making multiple credit card payments on various due dates, a debt management plan enables you to make ONE payment to One agency on ONE due date.

I will never forget those old days when I had to run 6 banks to bank in 15 credit card payments!

Now I only need to make one payment to the credit counseling and debt management agency’s collection account by the end of every month. The single monthly payment will then be distributed by the agency to the creditors.

3. Waived Late Payment Fees. If you have late payment fees for delayed credit card payments, the credit counseling agency will help you negotiate with your creditors to waive them.

4. Creation of a Budget. The program you choose usually will help you to organize your personal finances with the creation of a budget. In this way your credit counselor can make sure that you are able to make your monthly debt repayment on time.

5. Peace of Mind. With the help of a debt management plan, you are able to start organizing your money and seeing how the amount of debt reduces and your personal savings increases.

Of course, there are disadvantages of enrolling in a debt management plan too. Before you decide if a debt management program is right for you, check the other debt relief alternatives and balance the advantages and disadvantages.

Let me share with you the Hilderbrandt family‘s success story of paying off their debt by consolidating all their payments into one under a debt management plan while changing their lifestyle.

Russell and Kathy Hildebrandt, along with their three children, were honored with the Professional Achievement and Counseling Excellence (PACE) 2009 Graduate Client of the Year Award by the National Foundation for Credit Counseling last week for their 5 years’ hard work and sacrifice to pay off their charge accounts and credit cards.

The Hilderbrandt family of New Richmond, Wisc., was in knee deep debt with personal loans and credit cards amounting to a staggering $106,000 in 2004.

How did they pay off their debt without signing up with any of the countless debt settlement companies that advertise on radio, television and the Internet? Well, they found a certified credit counselor by contacting NFCC to assist them with their debt.

Eliminating Unnecessary Spending. They paid off their debt the old fashioned way by drastically changing their lifestyle. They bought clothing at thrift stores, eliminated gifts, and purchased only generic and store brands at the grocery stores.

That’s not all. They also stopped eating out and often ate hash browns, which they got for free.

Getting a Second Job. Russell sacrificed his sleep for a couple of years by taking a second job. At first their debt didn’t seem to decrease much. But as they paid off one balance, they applied the monthly payment to another, until they paid it off.

Four years and four months later the Hildebrandt family’s debt was finally paid off and they even saved enough money to buy a house in New Richmond.

To avoid falling into the hands of a disreputable credit counseling agency, make sure you find a reputable credit counselor that is certified, is affiliated with NFCC, and charges little or nothing for the service.

Once you have established your degree of need for debt help, the next step of your debt management program is to decide whether you will enroll in a debt management plan designed for you by a credit counseling agency or do it yourself debt management to achieve total debt free.

If you have made the decision to go debt free through a DMP offered by a credit counseling and debt management company, make sure you opt for a not-for-profit credit counseling agency that is of a member of the National Foundation of Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).

It won’t be worth your time or effort to choose a debt management company that charges a large monthly fee for their services as your debt problems may get even worse.

By attending a credit counseling briefing, a certified credit counselor will let you know the debt relief solutions available for your situation.

If it is determined that you need a DMP to help you get out of debt, your credit counsellor will contact your creditors in an attempt to stop harassing telephone calls, lower your interest rates, lower your monthly payments, and perhaps stop late fees and over limit fees.

So a debt management program is created to help reduce your overall monthly debt, help you save on interest fees, and improve your credit rating by paying creditors on time.

Take note, though. Before signing a debt management plan contract, make sure the written agreement detailing all the services discussed and the exact costs you will have to pay.

Whether your aim is to restructure your multiple debts into one affordable monthly payment, pay off all your bills sooner than before, avoid late charges, put an end to harassing phone calls from your creditors, save thousands of dollars in interest, lower your monthly payments substantially or avoid bankruptcy, you can achieve it with a debt management plan.

Of course, not everyone believes that credit card debt counseling can help you be debt free. This has got to do with the many scams reported trying to make quick money from people who are already drowning in debt and desperately in need of debt relief.

As not all credit counseling and debt management companies are genuine and provide good advice, choosing a reliable credit counseling company becomes a critical factor in determining the success of credit card debt counseling.

As a general rule, go for a reputable non-profit credit counseling agency that is affiliated with the National Foundation for Credit Counseling (NFCC), usually known as Consumer Credit Counseling Services (CCCS).

A legitimate credit counseling agency can help you in not just getting rid of your credit card debt, but eliminating it in a way that is so cost effective. In other words, your credit card debt gets to be settled much quicker than if you were trying to do it all by yourself without any credit counseling.

Moreover, getting help from a proper credit card debt counseling can save you a lot of time and energy that you would have otherwise spent on studying all about credit card debt, gathering information about various credit card debt relief options and comparing them.

Further, the various financial solutions such as credit counseling, debt consolidation, debt management programs, debt settlements and bankruptcy provided by the credit counseling company enables you to choose one that appeals the most to you.

There is no doubt with regards to the endless benefits credit counseling can bring to you. However, you have to be careful with fly-by-night companies to avoid being scammed into paying tonnes of monthly service fee and leaving you with more debt than ever.

A credit counseling agency, either non-profit or for-profit, offers you credit counseling advice including how to use credit lines wisely; establish a workable budget; keep track of your bills; and best manage your money.

During a credit counseling session, a certified credit counselor will first gather as much information about your income, expenses and debts as possible. Once he has sufficient information from you, he will evaluate the information, discuss your situation with you and offer the most appropriate debt management advice for your situation to help you rectify your financial problems.

If it is determined that participating in an educational class is not sufficient to help you get back on the track to financial security, you will then be recommended to enroll in a debt repayment plan.

Debt management plan is also known as debt repayment plan.

When choosing a credit counseling agency, it’s important that you spend enough time researching and picking the most reputable agency.

Most important of all, look for a credit counseling and debt management agency that has satisfied clients, offers personalized service from certified counselors, educates you how to make appropriate financial choices and provides you with the tools you need to achieve financial security.

Remember, the best credit counseling service agency needs not have a big advertising campaign. Don’t be tempted to think that just because it has a big advertising campaign, it is the best.

A reputable and reliable credit counseling and debt management company normally relies on past clients for referrals rather than soliciting business through constant television ads, infomercials and telemarketing or spam e-mails.

It’s too late for me to be debt free fast with credit counseling or DIY debt management, but it’s not too late for you, right? Don’t wait until you need to enroll in a debt management program, debt settlement plan or declare bankruptcy.

At that time when I was thinking about getting out of credit card debt with a free debt management program, I was already a few months behind my monthly payments and wasn’t able to pay the minimum payments.

Not only were there non-stop phone calls and letters from banks and creditors, I started getting phone calls and visits from third party collection agencies!

If you had been in my shoes, would you have thought about credit score or cared if a a debt management program would damage your credit score?

I didn’t care. What I wanted to do at that time was to get into a shelter for a temporary relief; a credit counseling and debt management agency for a temporary financial relief.

I needed to enroll in a debt management program that could consolidate my multiple credit card payments into one payment and stop all the harassing phone calls, warning letters, third party collection agencies, exorbitant late payment fees and over-limit charges.

Since I was put in the free debt management program in October 2008, I have been able to heave a relief. Paying ONE smaller monthly payment to ONE credit counseling agency on ONE due date enables me to save more money for the emergency funds and pay my credit card debt without much stress.

It’s true that if you have loads of debt but are current on all your payments, your credit score may drop when you enter a debt management plan.

But if you have several late payments or are currently way behind on any credit payments, chances are a debt management repayment plan actually improve your score.

Enrolling in a debt management program is a long term decision, and the fact is repaying your debts is the best thing for your credit score.

“Hi, I am curious as to why you opted for a debt management program through a credit counseling and debt management agency.

Much of what a debt management company does only involves contacting your creditors and negotiating alternative repayment plans with reduced interest rates and fees that you can actually do it yourself.

Most creditors will be eager to agree with lower repayments and reduced interest rates as they don’t want you to declare bankruptcy.”

I have been asked by a few US and UK blogging pals why I enrolled in a DMP while I could actually do the debt management myself.

First off, the banks and creditors in my country are more heartless and money sucking than those banks and creditors in the US or UK.

Before I enrolled in the free debt management program, I did call up or write in asking for alternative repayment plans with lower monthly payments and reduced interest rates. Unfortunately, some didn’t bother to reply while some came back with interest rates that I considered still very high.

Most creditors agreed to reduce the finance rate from 18% per annum to 15% or 13%. The lowest interest rate was 9% per annum and it’s from a bank that I had been making my monthly credit card payment more consistently.

Guess what the creditor counselor was able to negotiate with the banks? The interest rate was reduced by many points, between 6% and 7% by most of the banks and only one bank insisted on 13%.

The low interest rate is a huge help since I had been paying 18% or more, and had also been late on more accounts. The reduced APRs can save me thousands of dollars in long run.

As for lower monthly payments, NONE of the banks wanted to reduce the monthly payment from $150 or $200 to $50 or $60 when I did the debt management myself. But when it’s the credit counseling agency that did the negotiation on behalf of me, they were willing to reduce the monthly payments.

You may think that it’s because I pay enrollment fee and a monthly service fee to the agency that it’s easier to get things done. No. Free of charge.

I am in a free debt management program and agency set up by the government to provide financial counseling and debt management to individuals as well as financial education to help individuals take control of their financial situation.

In the US, you have non-profit and for-profit debt management companies that charge initial fee and a modestly monthly fee, but in my country there is only ONE credit counseling and debt management agency and its debt management program is free of charge.

Once it is determined that you are eligible for a debt management program, your credit counselor will negotiate with your creditors for lower payments and interest rates.

Instead of making multiple credit card payments to different banks and creditors on various due date, a debt repayment plan enables you to make ONE payment to One agency on ONE date.

You start making payment to the credit counseling agency’s collection account and the monthly payment will then be distributed out to your creditors.

Take the late payments or insufficient funds seriously! They can cause your debt management program to become null and void, so be in time or on time when it comes to making your monthly repayment.

While in the DMP, you can’t apply for any new credit cards or loans. I have been living without the convenience of a credit card for more than 7 months already.

I have been told by my counselor that I can make extra payments to some of the large credit card balances while I am in the program. Just make sure that I have some emergency funds before I go to settle a large credit card balance.

If your debt is up to your ears and you are looking for debt relief options to bring relief, a debt management program can be just what you need.

The Federal Trade Commission (FTC) has very useful information about using debt management programs (DMPs) effectively and about how to know if the program is legitimate.