Will Credit Counseling Help You?
To deal with growing credit card debts and other unsecured debts (such as medical bills, department store cards or gas cards), many consumers in Minnesota and across the country are considering credit counseling as a form of debt relief. If you are also experiencing your own personal debt crisis and are wondering if there are reliable, honorable and proven methods to get out of debt, there's good news. Through a credit counseling program or debt consolidation, consumers seek relief by combining or consolidating all of a consumer's debts into a single, more manageable payment each month. Through the benefits of debt relief such as lower interest rates and the waiving of late fees and penalties, a debt management plan (DMP) coordinated by a credit counselor or debt counselor can help consumers get out of debt at an accelerated pace and, quite possibly, save a substantial amount of money as well.
If you are experiencing a financial hardship and need to explore your debt relief options, you can get your free debt relief evaluation and savings estimate at no obligation. Start now.
How Does Credit Counseling Work?
Credit counseling agencies provide a variety of helpful debt relief services for individuals and families through certified credit counselors or debt counselors. This includes assessing an individual's unique debt circumstances, budgeting, financial education, and in many cases, providing you with tools to help manage your finances and get you closer to achieving your dreams of financial independence and a life free of debt!
Debt Management Plans
Credit counseling agencies may also help provide debt relief by working with debtors to establish a debt management plan, also known as a DMP. Debt Management Plans could provide debt relief by:
- Lowering monthly payments
- Reducing interest rates
- Waiving of late fees and penalties
- Consolidating or combining debts into a single, more manageable, monthly payment
- Helping individuals save substantial money and allowing you to get out of debt in less time than you could on your own if you didn't have the benefits of lower interest rates and continued to pay only monthly minimums.
Debt Relief Alternatives
Many individuals and families are helped through credit counseling programs but it's important to know that debt management requires basic discipline and restraint to avoid credit cards. It normally takes three to five years to complete the program and realize the full benefits of debt relief. On the other hand, an alternative to debt management is debt settlement, which is a more aggressive form of debt relief that could help you get out of credit card debt faster, assuming you can accumulate money in a "set aside" account which can later be used to extend a settlement offer to creditors.
With debt settlement, it is interesting to note that if credit card companies decide eventually to "sell off" your debt as "bad debt" to a collection agency, creditors may get as little as 10 cents on the dollar. Due to this fact, it is not surprising that credit card companies may be willing to accept a reasonable settlement offer made by you or by a debt settlement company on your behalf. It is important to be aware that when consumers default on the terms of credit card agreements to set aside monies in a settlement fund, creditors may threaten or take legal action. In addition, money saved through credit card settlements are subject to federal taxation. Finally, debt settlement typically will have a negative impact on personal credit, but not as serious or long lasting of an impact as personal bankruptcy.
Debt relief programs and plans may offer significant help to many individuals who are truly unable to pay off their debts or falling behind on their payments. However, in these tough economic times, there are many individuals and families who might need access to life's basic essentials such as food, housing, childcare, or even utilities. To help these people, the state of Minnesota offers several programs and resources that address these specific needs and more. To learn more, go to the state's homepage and find the Social Services section.
To see what debt relief could do for you and how much you could save, take a moment to answer a few basic questions so that we can connect you to a BBB-accredited debt relief provider who may assist you. It's important to understand clearly how much debt relief can potentially save, how long it will take to realize those savings, and the impact that any debt relief program could have on personal credit and taxes prior to enrolling in any debt relief program.
To learn what debt relief could do for you and get an estimate of how much you could potentially save - take a moment to answer a few questions online to get your free debt relief analysis and savings estimate.