Get Rid Of Credit Card Debt With The Help Of Credit Counseling
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When you realize that you have a ton of credit card debt that is hanging over your head, and that it is time to do something about it, you may be shocked to find that you simply do not have enough cash coming in to pay all of your debts each month, and still have enough money to cover basic living expenses.
Many people make the mistake of living off their credit cards, thinking that they will pay them later, but in reality, later rarely comes until it is too late, and they have more debt than they know what to do with.
If you find yourself in this situation, you should take heart in the fact that you may not necessarily have to file for bankruptcy; you can get rid of credit card debt with the help of a legitimate, non-profit credit counseling program.
By this point, you probably think I am trying to sell you something, or to persuade you to use one particular credit counseling agency, but in fact, just the opposite is true. There are many credit counseling programs out there, and not all of them have your best interests at heart, there are some that want to just take advantage of you so they can line their own pockets.
If you decide to go this route, you will need to take your time, and find a credit counseling agency that has a good reputation, and that really is legitimate, so that you can make certain you are making a decision that will help you, rather than make a bad situation worse.
After you have done your homework, and found the agency you think you want to work with, a consultation appointment will be made. Some agencies will allow you to conduct this initial appointment by phone or email, while others will require that you actually physically come into their office.
You will be asked to have all of your current monthly bills with you, along with your check stubs for the last month. These agencies can only work with debts that are unsecured, but you will need to bring in proof of all debts, so that a budget can be planned accordingly.
Your counselor will work with you to determine how much you can afford to pay each month to your credit card accounts, and then will submit proposals to all of your credit card lenders to see if they will accept the terms you have come up with. Usually included in those proposals is a request to cease all late and over/limit fees on the account, and to lower the interest rate to a more manageable percentage, usually less than 10%.
Once your credit card lenders accept the terms, you will be making your monthly payments directly to your credit counseling agency, and they then will disburse those funds to your creditors. Once one account is paid in full, the extra payment will be split among your remaining accounts, and so on until all accounts have a 0 balance.
The accounts that are enrolled in these programs usually are closed by the lender.
Along with helping you to get rid of credit card debt, your credit counselor can also help you learn how to better manage your money, and can make suggestions that will help you avoid financial problems in the future.
Paying off your debt will do you no good, unless you learn how to manage your money so that you don’t have to rely on credit cards and loans in the future. That should be the main goal of every credit counseling organization.
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Credit counseling does not help you always in reducing your debts, you can go for either debt consolidation or debt settlement. I was able to settle my debts with the help of a company called Freedom Debt Relief and their debt reduction program helped reduce my debt amount also.