How Credit Counseling Debt Relief Works
For many people, the uncertainty that comes in seeking debt relief is more frightening than the actual process itself.
Credit counseling is just one alternative that people have when it comes to paying bills or finding other means of managing their debt.
Credit counselors can offer various debt management plans for consumers as well as educational resources and financial advice.
Non-profit debt relief is an effective solution for any consumer who has tried negotiating on their own with their creditors to get lower interest rates or different payment options.
If you owe credit card debt or unsecured loans and cannot afford the monthly payments, you need to seek help.
Debt settlement or a debt consolidation loan might prove to be more effective for some, but it is an individual decision as to which path to take.
Credit counseling as a debt relief program has many different steps in the process.
Here is what you can expect with your debt relief through credit counseling: - First, the company will total your monthly expenses and your monthly income.
This will help them to help you determine where you can stop spending and if a more effective budget is all that you need.
In the event that the debt problem is proven to be unmanageable, the credit counseling agency will then go on to recommend enrollment in a debt management plan.
- Once the accounts are reviewed, the consumer will be given a quote of what they will be paying each month based on the money that they owe.
If the consumer agrees with the terms, they will then be instructed to close their credit accounts immediately.
- The counseling organization will then contact the creditors.
They will write a proposal asking for interest rate reductions, and it is up to the creditor to accept or reject this offer.
The agency can keep applying for interest rate reductions if they are denied, but there is no law requiring creditors to accept any offer.
- The consumer then makes monthly payments to the credit counseling agency.
The agency distributes this money among the creditors as needed, and keeps a certain percentage for themselves as a fee.
- The counseling program will last for 4-5 years on average, or until all debt is paid in full.
Keep in mind that the majority of consumers don't actually make it through the program, so those that do should be commended for their hard work.
Credit counseling is just one alternative that people have when it comes to paying bills or finding other means of managing their debt.
Credit counselors can offer various debt management plans for consumers as well as educational resources and financial advice.
Non-profit debt relief is an effective solution for any consumer who has tried negotiating on their own with their creditors to get lower interest rates or different payment options.
If you owe credit card debt or unsecured loans and cannot afford the monthly payments, you need to seek help.
Debt settlement or a debt consolidation loan might prove to be more effective for some, but it is an individual decision as to which path to take.
Credit counseling as a debt relief program has many different steps in the process.
Here is what you can expect with your debt relief through credit counseling: - First, the company will total your monthly expenses and your monthly income.
This will help them to help you determine where you can stop spending and if a more effective budget is all that you need.
In the event that the debt problem is proven to be unmanageable, the credit counseling agency will then go on to recommend enrollment in a debt management plan.
- Once the accounts are reviewed, the consumer will be given a quote of what they will be paying each month based on the money that they owe.
If the consumer agrees with the terms, they will then be instructed to close their credit accounts immediately.
- The counseling organization will then contact the creditors.
They will write a proposal asking for interest rate reductions, and it is up to the creditor to accept or reject this offer.
The agency can keep applying for interest rate reductions if they are denied, but there is no law requiring creditors to accept any offer.
- The consumer then makes monthly payments to the credit counseling agency.
The agency distributes this money among the creditors as needed, and keeps a certain percentage for themselves as a fee.
- The counseling program will last for 4-5 years on average, or until all debt is paid in full.
Keep in mind that the majority of consumers don't actually make it through the program, so those that do should be commended for their hard work.
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