Credit and Debt Counseling

Credit and Debt counseling has become increasing popular in America amongst indebted consumers. This is due to the fact that the average American household credit card debt is $30,000. As a result, many companies have started offering consumers different forms of debt counseling.

Debt Counseling Debt Settlement

Debt settlement, also known as debt reduction and debt negotiation, involves negotiating with creditors to settle their outstanding debts for less than they owe. When a consumer is enrolled in a program, their total balance is negotiated down and they only have to make one payment to all of their creditors combined at a reduced rate (usually half or even less). For consumers with high unsecured debts, this program will allow them to save tens, if not hundreds, of thousands of dollars because not only are the principal balances settled, but the interest rates are all completely eliminated. Moreover, qualifying for debt settlement is based on who you owe and what state you live in, it has little to do with your credit history and you do not need a home to get approved.

Credit and Debt Counseling Debt Management Plan (DMP)

Debt management plans are typically a managed arrangement with creditors through a third party. The consumers may use a free creditor-sponsored DMP organization or a fee-charging DMP company. A good DMP company can recognize what creditors will agree upon and will only suggest a consumer pays what they can realistically afford after their priority expenses are met. Priority expenses usually include mortgage or rent, food and utilities. Creditors usually request a review of the consumer’s situation annually to ensure they are paying as much as they can reasonably afford.

Debt Counseling Debt Consolidation

Debt consolidation loans allow the consumer to make one simple payment a month as opposed to dispersing multiple payments to all their creditors. In turn, the consolidation company fronts the money to the consumer so they can pay off their creditors in full. Debt consolidation services still require consumers to pay 100% of the debt plus an average of 8% interest per creditor. Programs usually last about five years and show up on a consumer’s credit report as: “currently enrolled in a debt management program.” This reflects negatively when applying for credit.

Debt Free Counselor provides free consultations for consumers experiencing medical or financial hardship and are overwhelmed by credit cards, personal loans, medical bills, collection accounts, or other unsecured debts. You can fill out our application page and be contacted by one of our debt counselors or you can call now to be connected immediately

(877) 479 4545