In years past, wages have failed to keep up with the higher cost of living. The still lingering financial crisis and the downturn of the economy left many people unemployed for an extended period of time. With this in mind, it is of little surprise that personal debt in the United States has skyrocketed to levels never before seen. The process of paying down this debt can seem utterly overwhelming for many, and the process of even beginning to start to pay down this debt can seem insurmountable. Credit counseling services and a Debt Management Program (also known as a debt elimination plan) from an accredited non-profit credit counseling agency can help.
Being in debt is highly stressful but unfortunately, it’s extremely common for many consumers. It can come about when you least expect it. If you are irresponsible at spending or simply have had to make a huge, unexpected purchase, it’s easy to fall into the trap of owing a large amount of money. Fortunately, there are options that you can take to begin the process of recovering from a financial disaster. Two of them that are especially helpful are debt elimination plans and free consumer credit counseling. Let’s find out more about both!
What is a debt elimination plan? –
If you are having great difficulty in paying back your creditors, this is one of the best options available to help you. It involves entering a debt-elimination program (also known as a Debt Management Program) from a reputable non-profit credit counseling agency that can help you to pay off what you owe while allowing you to avoid the necessity to file for bankruptcy and protecting your credit score.
After you have chosen a company to work with to help alleviate your financial problems, you will either have a telephone counseling session, an online counseling session, or you can meet face-to-face with a credit counselor. Your credit counseling session should always be free of charge. Afterward, your counselor will go over all of your financial documents and evaluate your finances so that he or she can get a better understanding of your debts and compare them to your income and regular monthly household expenses. Then, you will be able to move forward toward a solution.
Credit counseling is a great service offered when you want to enter debt relief programs. Your credit counselor will advise you of the best ways to go forward so that you can get your finances in order. Your counselor may recommend that you sign up for a Debt Management Plan (DMP) so that you can find financial relief and more easily be able to pay back your creditors. A DMP is a documented drafted “proposal” to be sent to your creditors.
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Generally, your credit counselor will request that the interest rates and fees tied to what you owe be reduced or eliminated altogether. These creditor concessions are usually already set in place by each creditor and very rarely can there be any true negotiating. It means you end up paying a lower amount than the total that you owe because interest rates are either reduces or eliminated and fees are waived. In many instances, creditors will be willing to overlook the interest and fees simply so they can be paid back what they are owed. They don’t want you to file for bankruptcy.
After your creditors agree to the terms of the DMP, you are required to pay back what you owe on a monthly basis. This monthly amount is agreed upon by the creditors and yourself. You then need to make only one monthly payment to the credit counseling agency. The agency will disburse the funds every month according to your DMP agreement. Credit counseling is a requirement when you use the DMP option because it’s essential that you learn what steps you must take before and after you join the program. For instance, you are not allowed to apply for new credit while you are paying back your creditors on a DMP.
Credit Counseling is the first step! –
Credit counseling is a regulated industry that helps the growing number of people who have significant debt that they need to pay off. The credit counselors who work for these non-profit agencies have the extensive financial knowledge, training, and real-world experience; their jobs allow them to see the effect that debt has on people. This experience gives them the ability to help educate the consumer on budgeting principles and ways to avoid incurring any more debt. The skills they teach can help you avoid having an even greater debt obligation to take care of in the future.
The real benefit that these agencies provide for many consumers, however, is their ability to transform your multiple credit card accounts that are full of debt into one manageable monthly payment through a debt management program. By taking responsibility for the disbursement of money on your accounts and by negotiating with your creditors, they can usually help stop collection calls, get rid of most creditor fees, and deal with your creditors for you. These non-profit debt consolidation agencies can also substantially reduce your interest rates in most cases and allow you to pay off your debt in a shorter period of time.
For those consumers who have incurred a higher level of debt than they can reasonably be expected to pay off by themselves in just a few years, these debt management services can provide relief. Excessive debt is an albatross that makes it difficult to plan for the future. The interest that accumulates can be overwhelming, and unfortunately, it’s easier than ever before to get into debt trouble. By researching “free debt consolidation” or “non-profit credit counseling services” and gathering as much information as possible, you can begin your journey to recovering your financial health and start looking forward to the future again.
Non-profit debt consolidation agencies and for-profit debt settlement companies are very different from one another. Please be wary of debt settlement companies that offer total debt elimination in a few months. You didn’t get into debt overnight and you definitely can’t get out of debt overnight. Debt settlement has many drawbacks and also has the potential to worsen your current situation. It can ruin your credit score for many years.
Ask a credit counseling agency questions about debt consolidation, debt settlement, and debt management programs. They are there to help you in your time of need, so take advantage of their free services. These are some of the best options for consumers who are in debt. You will find a great deal of financial relief and can move on toward repairing your finances. Give us a call at 1-866-699-2227 or visit our contact page: https://www.advantageccs.org/contact-us