Consumer Credit Counseling

When you are overextended financially, the stress can be overwhelming and it may not seem possible to manage your money problems on your own. If you are facing this situation, a credit counseling service can help you get a budget and debt payment plan put in place. For someone who is dealing with extreme debt and unable to pay bills, consumer credit counseling services can be a light at the end of the financial difficulties tunnel. Consumer credit counseling is designed to help people coping with tough credit-related issues to pay off their debts at reduced rates and facilitate more timely elimination of their debt.

Your application will be reviewed by a counselor who is qualified to help prepare a budget plan that you and your creditors will approve. The budget plan outlines exactly how each debt is to be repaid. Once the plan is approved by all parties, you simply make your assigned payment to the credit counseling service. Changes won’t need to be made to the plan unless there is an emergency or a change in your financial situation. Consumer credit counseling agencies negotiate with creditors for you to reduce interest rates, eliminate late fees and re-age (bring accounts to current status) your accounts. You will able to make a single, substantially reduced monthly payment that more realistically fits your budget.

Benefits of working with Consumer Credit Counseling Services

Consumer credit counseling services customize confidential programs to meet your specific needs and get you back on the road to financial freedom.

Benefits are:

• Reduced payments.
• Reduced interest and finance charges.
• Reduced creditor calls and waived late and over-limit fees.
• Reestablished credit.

Debt Repayment Plan

Your credit counselor may suggest a debt repayment plan. This plan, approved by your creditors, is an arrangement that allows you to repay your unsecured debts at reduced interest rates. You make a single payment each month to the counseling agency, which disburses the money to your creditors according to a payment schedule the counselor develops with you.
You will probably have to agree not to apply for, or use, any additional credit in order to participate in a repayment plan. You will be required to commit to regular, timely payments over a period of time (which could be 48 months or longer), and your success depends solely on you sticking to the plan and making your promised payments.

Credit Counseling Agency Checklist

You need to ask certain questions of credit counseling agencies before you commit to using a particular agency. You need to be able to trust the agency and should know the answers to these questions:

• Is this agency a non-profit organization?
• How much will these services cost?
• Are agency services confidential?
• Will they devise a plan tailored to fit your needs?
• Are the counselors certified?
• Are budget and credit education opportunities offered?
• Will my funds be protected?
• Is the agency accredited?

For more information on choosing the right credit counseling agency, click here.

What happens in my session with a consumer credit counselor?

You and a certified consumer credit counselor will review your financial situation. Remember, these counselors are non-judgmental, so you need to go into your session prepared to focus on how to get out of financial trouble. That’s what your counselor will be doing. Every attempt will be made to help you form a budget and spending plan that allows you to afford living expenses and payments to your creditors. All your dealings with the consumer credit counseling agency will be held in the strictest confidence.

How much do these services cost?

Depending on state laws and the support each individual agency receives from outside sources, the cost of the services you receive will vary. Usually, an initial processing fee is charged, and a nominal monthly fee is assessed for managing your accounts. Sometimes, depending on your personal situation, certain fees can be waived and you may not be charged anything for the services you receive.

Go to Consumer Credit Counseling Services page to select a program that can help lower your debt.