Get debt help from a credit counseling agency.
If you are looking for an alternative to a debt settlement plan, using the services of a credit-counseling agency and the debt-management plans (DMP) they administer are other options to consider. Some individuals may even qualify for free advice and support, if their income is low enough.
A credit counseling agency can definitely guide you through the process of a DMP, which can provide you with help for your medical and credit card debts. The agencies offer a variety of services, including they can review a consumers finance options, help an individual develop a budget and also provide education on managing debt. The overall objective is to improve a consumers financial situation.
In addition they can also set up debt- management plans that will help you work with a creditor to reduce and eliminate late charges. These particular plans may also lower the interest rates on your debts while the consumer continues to pay a balance in full over an extended period of time. The fees you pay a credit counseling agency are also reasonable. Startup fees shouldn't exceed $50, and any monthly fees you may need to pay them should be about $25, according to statistics from the national non-profit credit-counseling foundation.
What other services do credit counseling agencies provide?
A number of resources are available. Some of the other services that are provided by a credit counseling agency that can help you get out of debt include:
- They will provide tailored budgeting and money management advice for your personal situation to help you prevent future debt problems, control your monthly expenses and eliminate your current financial obligations. While none of this is guaranteed, it is a focus.
- They will negotiate with your creditors on your behalf to get them to reduce or eliminate late fees and charges. During the negotiations they will also have your creditor extend the term of your loans and debts, and they will try to get you to pay a lower interest rate.
- A credit counseling agency will review your entire financial situation, and if your debt is burdensome enough, the counselor will work with you. They can present customers with options and encourage you to enter into a debt repayment plan that will require you to pay a set amount to the counseling agency each month. They will then take this monthly payment and pay it directly to your creditors and various bills.
Find a credit counseling agency
In addition, the national foundation and experts strongly recommend that consumers select certified credit counselors and even strongly consider using a nonprofit counseling agency. Look into those that may be affiliated with groups, such as the foundation, with the highest ethical and financial standards. These companies are usually certified by the federal government, including the Department of Justice. They offer consumers a wide range of mostly free or low cost services. Click here for a listing of approved non-profit credit counseling agencies.
If someone can't afford the fees, the credit-counseling foundation says that bankruptcy may be a better option for consumers who can't afford to pay for debt management or a settlement program. Unfortunately there are some people who are just so far behind. they may be out of solutions and they really need to go through the bankruptcy process. In some cases this approach should be taken as they should not need to pay out all of their remaining savings in order to try to improve their financial situation, and they should not pay some of these fees to these third parties.