Debt reduction can be a laborious process not nearly as fun as accumulating the debt. You may be horrified at the amount of money you owe and vow to get your debts under control, but face a bewildering array of debt reduction programs. Debt settlements allow you to repay only a portion of your debts, while debt consolidation rolls multiple debts into one loan. You need credit counseling help to develop a comprehensive debt reduction strategy.
Debt problems arise from seemingly innocuous practices such as making minimum credit card payments or paying one bill with a different credit card. Maybe you charge routine purchases such as vehicle fuel or your daily lattes. Add a pricey expenditure such as a transmission replacement or unexpected medical bill. Consider whether your financial situation is improving or sinking further into the red, and decide if debt reduction counseling is appropriate.
Financial Counseling Services
A reputable credit or financial counseling service often helps you reduce your debts and educates you in the finer points of money management. Your counselor assists you in developing a budget that includes essential expenses and questions impulse purchases. You work to forestall future debt problems. You may have access to free workshops and planning materials. Reputable counseling services freely provide introductory information without asking you for personal details.
Debt Management Plan
A certified credit counselor often assists her clients by developing a debt management plan. The counselor reviews your income and expenses, and asks for cooperation from creditors representing unsecured debts. Examples include student loans and credit card bills. You deposit a predetermined amount of money with the credit counseling service each month, and the firm pays your creditors accordingly. The credit counselor should also provide budgeting and money management assistance.
You can easily locate online or brick-and-mortar credit counseling and debt reduction companies. Some firms may have questionable compensation practices, making a thorough investigation necessary before you sign a contract. Look for a company accredited by the National Foundation for Credit Counseling, a non-profit counselor certification group. Approved counselors must have a demonstrated background in credit use and money management and must complete an independent certification program.
- PR Log: Aggressive Debt Reduction: How to Pay Back Half of What You Owe Creditors
- Bankrate.com: Debt Reduction: The Right Call for Help Can Lift Your Credit Card Bill Blues
- Office of the Attorney General of Florida: How to Protect Yourself: Credit Repair and Debt Relief Services
- Federal Trade Commission: Facts for Consumers: Knee Deep in Debt: Credit Counseling and Debt Management Plans
- National Foundation for Credit Counseling
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