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Debt consolidation and credit counseling services: How they can (and can’t) help

Created: On December 7, 2010 @ 5:17 pm In

Struggling with credit card debt can impact all aspects of your life, and it ain’t pretty. Arguments over money and spending, yelling at the kids, receiving unwelcome phone calls at work, these are a few highlights of living life under a burden of debt. What can you do if you can’t afford to pay off your debt?[1] Debt consolidation and credit counseling services work with you and your creditors to accomplish the following goals:

  • Review your financial information for developing a cash based budget and an affordable repayment plan for your debts
  • Financial counseling: This can assist with determining how and why you got into debt; you’ll learn about inappropriate motivations for spending and receive advice for budgeting and debt management.
  • Based on information you’ve provided, credit counselors negotiate with creditors for waivers and/or reduction of finance charges, and for establishing affordable repayment terms. If you don’t qualify for a debt consolidation plan, [2] credit counseling services can refer you to additional services and debt consolidation resources.
  • Provide a written repayment plan, along with its terms and conditions including where, when, and how much you’ll pay toward your repayment plan.

Credit counseling and debt consolidation help: What they can’t or won’t do

  • No instant results: Don’t confuse debt consolidation and [3] credit counseling serviceswith unsolicited offers and advertisements for “instant” credit repair, or offers promising to “erase” bad credit. Sorry folks, but rebuilding credit takes time and effort. Credit counseling services cannot remove negative entries from your credit reports; these will drop off in time.
  • Make excuses to your creditors: It’s essential to make payments to your credit counseling service exactly as required in your agreement. Missed payments can lead to termination of your plan.
  • Giving up your credit cards: Debt consolidation and credit counseling services typically require that you close all active credit card accounts as a condition of your debt consolidation and repayment plan. Although your credit will likely improve over time as you repay your debt, your credit counseling service cannot guarantee that you’ll qualify for new credit cards after your debt consolidation and repayment plan is completed.

Gaining freedom from debt through [4] credit counseling and debt consolidation plans can improve your finances and overall quality of life. Cooperating with your debt consolidation and credit counseling service is a first step toward regaining financial solvency.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2010/12/07/debt-consolidation-and-credit-counseling-services-how-they-can-and-cant-help/

URLs in this post:
[1] Debt consolidation and credit counseling services: http://www.debthelp.com/debt-consolidation/credit-counseling.html
[2] credit counseling services: http://www.nfcc.org/
[3] credit counseling services: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm
[4] credit counseling and debt consolidation: http://www.debthelp.com/kc/debt-management-seven-steps.html