Debt counseling is also called debt management. It has become popular these days as many of the consumers are drowning in credit card debt. The debt counseling programs are useful for the people who are finding it difficult to pay their debt or managing it.
Here are 10 things to know about debt counseling before working with a debt management agency:
You could do it by own self: The main thing what debt management agencies do is to contact with your creditors and work out the alternate plan for repayment including reduced interest rates and charges. If you are not able to repay your debt you can do this thing yourself. Most creditors will help you to pay your debt as they want to help the consumer to avoid bankruptcy.
Your credit score might fall: There is a lot of information available that suggests how enrolling in debt management can affect your credit score. In case you have a lot of debt but pay all of that on time, chances are that your credit score may fall if you enroll in debt management program.
You must give up your new credit: once you choose to enroll in debt management program, you will not be able to open new lines of credit. In case you do, you will lose all the benefits that your debt management program has negotiated for you.
It doesn’t take effect instantly: Once you decide to enroll into debt management plan, it could take months your creditors receive their first payment.
Interest rates will reduce: Many creditors will lower your interest rates once the debt counselor contacts them.
A fee will be waived: debt counselor could be able to get your future late fees waived charged by the creditors.
One monthly payment: Debt counselor could be able to consolidate your debts into one monthly payment.
Best solution: you should choose the best company that can bring best solution to you.
Personalised service: you can have a dedicated debt advisor who can take care of your enquiry personally.
Also, you could avoid bankruptcy and your debts will be overseen by a debt management company once you enrol in debt counselling program.