Debt Counseling

Debt Counseling

Help for debt problems

Debt counseling can provide real relief to people struggling with credit problems and spiraling debt. The features of debt help programs vary from provider to provider, but all are aimed to help you get your finances back under control. They do this by helping you find solutions to your debt problems by working with your creditors.

While you may think of debt problems as being a new phenomenon, given the increase in credit card consumption over the past decade or two, debt counseling services have been around for over 60 years. They have helped tens of thousands of people get their lives back in order, and they can help you.

How Debt Management Counseling Works

A debt counseling service provides step-by-step debt help to people suffering under the weight of unmanageable credit problems. First, they will arrange for all your current credit accounts to be closed and capped so that the only new charges that can be added are finance charges from the credit card company. Then, they work with your creditors to negotiate lowered interest rates and reduced monthly payments, so you don't remain trapped in a cycle of frantically swimming upstream just to keep your head above water in a sea of rising interest charges.

If you have delinquent accounts, they will become current after working with a debt counseling service, which immediately benefits your credit rating. While your credit score may take an additional hit if you have to pay off less than the total amount you owe as the result of debt resolution negotiations, your road to financial recovery is still quicker with debt counseling than it is with bankruptcy. Personal bankruptcy should only be considered under the most exceptional of circumstances, as it will take a minimum of seven years to be removed from your credit report. Most debt counseling services can have you back on your feet in between three and six years, depending on your debt load.

Debt consolidation counseling is a slightly different phenomenon. It helps you weigh the pros and cons of getting a debt consolidation loan, which is something you may also want to consider.