What Is Consumer Credit Counseling? - Debt Consolidation Make ...

Consumer credit counseling is an aid to help people who face financial and debt issues to come out from the bad situation and get back their finances. Many people get into debt because they don?t know how to manage the money effectively. They spend more than the capability of earning it and buy things with future money that they can?t afford to pay it. The unpaid bills will snowball day by day and month by month until they become bad debt. Overwhelming debt may cause great desperation and debtors might end up filing a bankruptcy without knowing that there might be a better option for them to get rid of debt.

Bad debts will become worse if they get ignored. It will only be eliminated if you resolve it with a debt relief solution. But, many people don?t know where to get started and how to work the way out of debt. Fortunately, consumer credit counseling is able to provide them with a right direction to get rid of debt.

How consumer credit counseling works?

The key purpose of consumer credit counseling is to help people who are facing debt problems to restore their finances through effective management of their debts. Basically, it consists of two sections, 1. the debt and financial consultation and 2. the debt repayment via a debt management program (DMP).

Most consumer credit counseling agencies are operated by non-profit organizations with the purpose of giving a helping hand to those to need them. Therefore, they are giving free consultation services to people who approach them. So, if you are facing overwhelming debt problems, it is always a good approach to start with consumer credit counseling as it costs you nothing. A counselor will be assigned to analyze your debt and financial situations. You have to disclose all information related to your incomes, your credit card and loan balances for them to do an assessment on your financial capability and affordability to repay the debt.

Based on the assessment, the counselor will help you to analyze your debt and educate you on the factors that cause you trapped in debt and how to manage the debt. Then, he/she will propose a debt repayment plan with monthly payment you can afford. If you agree with the proposed plan, you have to sign up with a debt management program (DMP) and agree to follow the payment schedule as stated in the agreement.

You don?t need to pay a penny for getting consultation from the consumer credit counseling service unless you want to join the debt management program. The free consultation from consumer credit counseling service should be able to give ideas on how to handle your debt problems. You should take advantage of the free service to get as much information as possible so that you are able to make an informed decision and choose the best debt relief option to restore your finance back to order.

The debt management program (DMP) proposed to you is an optional debt repayment plan. It will charge a monthly fee if you decide to enroll into the program. You may reject the proposal if you have a better option to get rid of debt. But, if you can?t find a better alternative than the proposed debt management program, it will be the best option for you to restore a debt free living.

Once you have enrolled into the DMP, you have to commit to follow the repayment schedule and make the monthly payment on time. The consumer credit counseling agencies have close relationships with creditors. They will work on your behalf with your creditors to negotiate an agreed repayment plan that is comfortable and affordable based on your income level. It may not be an immediate fix on the debt problem, but if you follow the repayment schedule in the Debt Management Program, you are at a right path to move forward in getting of debt and be debt free in the near future.

Do you need to approach a consumer credit counseling service?

Consumer credit counseling is one of debt relief solutions, it may not fit you if you can?t benefit from it.?? It is important for you to access your situation when considering consumer credit counseling service. It can be the best option for you to get rid of debt if you fall in one of the given categories below:

1. You are in desperation mode due to overwhelming debt and you can?t think of a solution to get you out of this situation.
2. You try to get a restructure debt repayment plan from your creditor, but fail to get an agreement from your creditors to revise the existing plan.
3. You feel the financial burden due to high monthly payment for existing debt. You want reduce it to a more comfortable level without a consolidation loan.
4. You are not qualified for debt consolidation loan due to bad credit.

Read the advantages and disadvantages of Consumer Credit Counseling to get more information and learn how to benefit from the advantages of credit counseling service. If you unable to benefit from the advantages of consumer credit counseling, it may not be the best option for you. Then, you have to access other debt relief options and find the best solution to fix your problem.

One reminder to all debtors, bankruptcy filing is a destructive debt relief solution. It should be the last option and you should not choose this option unless you have to choice to get rid of debt. Always consult a credit counseling service to get all the necessary information and options available to get rid of debt without the need to file for a bankruptcy.

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