Right now, it is all too common for individuals to be in debt to the point that they need to enlist outside debt management help to be able to resolve their debts. Not only can the debt be overwhelming, but the stress of dealing with the problems associated with these debts can be debilitating. Along with all this, you have to try to come to a decision on how to manage your debt. You also have to be concerned about reliability when it comes to letting someone help you manage your finances.
Credit counseling is one of the best ways to get debt management help, but if you are seriously past due (more than 3 months), it might not work for you. Debt counseling has an enrollment fee of $50-$75 and a monthly fee of $30-$50. This may sound expensive, but it you consider that most of your interest rates are going to go down to 10% or less, $30-$50 is a steal.
The credit counseling company will do all the interacting with your lenders. You will make one payment per month to them and the credit counseling service will disburse it to your lenders as required. Your interest rates will be reduced, your fees will be eliminated and your collection calls will stop. The important thing here is not to enter into an agreement that you cannot fulfill. You will still be required to a make a payment that is about 2% of your total credit card balances. This debt management help will take 3-7 years depending on your total debt.
Debt management help through a credit counseling service can be what you need if you feel you are becoming overwhelmed with debt. However, this is probably not going to work for you if you have are not able to make the 2% payment each month or if your debt is more than 3 months past due. For this, you may want to look into debt settlement or bankruptcy.
Starting with a credit counseling company is a smart move. Most of them are nonprofit and will advise you of your best debt relief option, even if it not credit counseling. They also offer financial education and budgeting help.
