Credit counseling programs for debt management may be the best solution to end your debt problem

How do these debt management credit counseling programs work? – Debt Management Credit Counseling Programs are special programs established by debt counselors or credit counseling specialists to help you solve your debt problem and pay off your debts when they have gotten out of control and you cannot pay them on your own.

A Debt Management Credit Counseling specialist analyzes your debt load, which includes your credit cards, student loans, household bills, rent, mortgage, insurance, car note, etc. They then take your current income into account and with that information begin the process of negotiating with your creditors to come up with a revised payment plan that allows you to meet all of your obligations without drowning financially.

Creditors work with Debt Management Credit Counseling Programs because they realize that by forcing their hands they could be backing you into bankruptcy court where they probably won’t get anything. By taking this option and working with the consumer in the Debt Management Credit Counseling Program, everyone wins! The consumer is able to regain control of their finances. Creditors end up receiving a portion of the money they are owed instead of receiving nothing at all.

If you choose to enroll in one of the Debt Management Credit Counseling Programs, the repayment analysis will take into account all of your income and debt; however, the repayment plan will only include all of your unsecured debt. That means credit cards, personal loans, lines of credit, store credit cards, and other unsecured debt. The plan may also include medical bills, past due utility bills, and certain tax obligations. To be clear: the plan will NOT include auto loans, mortgages, or secured debt.

If you are having trouble making auto or property loan payments that are subject to lien or foreclosure, it is IMPERATIVE that you inform the counselor of the timing and circumstances. You don’t want to risk losing your property or car because you didn’t tell the debt counselor about your current situation. Plus, by doing so, he or she can advise you on the best course of action as you move forward to get your finances back on track. When it comes to the possible loss of your home and your transportation, things can get pretty stressful. The best way to relieve stress is to seek help, RIGHT NOW!

Although these programs are not credit repair programs and are not designed to fix bad credit, once you successfully complete the program, you will most likely enjoy a better credit score than before you joined. This has to do with the way new credit scoring systems tabulate credit scores.

As you make your payments on time, your credit score will begin to improve over time simply because creditors are reporting your payments up to date. Plus, once you’ve paid off your revised debt plan as agreed, you can really start building your credit score again.

In general, these programs offer debt-laden consumers one of the best options for getting their finances back on track. It’s easy to sign up for these programs, and most legitimate companies are non-profit, meaning you won’t have to pay any out-of-pocket fees or up-front fees.

Leave a Reply

Your email address will not be published. Required fields are marked *