If you are experiencing tough financial times and struggling to keep up with your credit card debts, then, credit counseling may offer assistance. These days, many residents of Arizona as well as all over America are also falling several months behind on their credit card debt payments, as well as other types of debts - such as medical bills, utilities, or department store charges. The good news is, with the right debt relief program, you may be able to lower your monthly payments and get on track towards paying off your debts at an accelerated pace. One of the viable ways that you may be able to get relief is through credit counseling or debt consolidation.
Debt consolidation through credit counseling typically involves consolidating or combining multiple credit card and other unsecured debts into a single, more structured, and more manageable monthly payment made to a credit counseling agency or service. The goal is, with a more structured and more affordable repayment plan, you can reduce your debts sooner than if you only continued to make the minimum payments at higher interest rates. Another popular debt relief method is debt settlement, where consumers can typically negotiate with their creditors for significantly less than what they owe. These days, both methods have become popular alternatives to filing bankruptcy, which can impact your credit score in more damaging and longer lasting ways.
To explore how debt relief can help you manage and pay off your debts, answer just a few simple questions to request your free debt relief analysis and savings estimate. It only takes minutes!
How Can Credit Counseling Help You?
Credit counseling, or also referred to as a debt management plan (DMP), is a proven and legal way for many consumers to find relief from credit card debts and other types of unsecured debts. Keep in mind that every individual's financial situation is unique, so it is wise to have a good understanding of how credit counseling works, and how it can potentially help you reduce your debts.
When you enroll in a debt consolidation program or DMP, credit counselors review your financial situation - taking into account your income, financial obligations, and other assets. Once they have a clear understanding of your finances and determine how much money you can reasonably allocate to paying off your debts, they will typically develop a game plan that can help you pay off your debts sooner than if you only continued to make the minimum payments at higher interest rates. Generally, as part of their service, credit counselors, submit proposals to creditors, on your behalf, requesting lower interest rates and the waiving of late fees and penalties. Creditors that accept the proposals are added to the debt management plan. Credit counseling agencies, in turn, distribute those funds to creditors that are in the plan.
Debt Settlement Alternative
While credit counseling is a wise move for many consumers who need debt relief, many consumers who are truly unable to pay off their debts may be interested in debt settlement. With debt settlement, consumers are hoping to settle with their creditors for substantially less than their original debts. However, like other debt relief methods, debt settlement also comes with risks.
First, as the term "settlement" suggests, credit card companies are certainly not legally required to accept your settlement proposal. In addition, you may be advised to stop making your credit card payments in order to save up funds, over a period of time that you can use to make a reasonable settlement offer. In many cases, creditors threaten to take legal action against consumers who fail to make their monthly payment while they are in the process of saving money for the settlement. Essentially, these consumers are defaulting on the terms of their credit card agreements and as a result, they will likely see their credit scores decline.
Yet, in spite of these risks, debt settlement remains a popular alternative to bankruptcy, which has a more serious and longer lasting impact on one's personal credit.
Find the Right Program for You
As mentioned earlier, the goal of debt consolidation through credit counseling is to provide you with a single, more structured, and more lenient repayment plan that can, ideally, help you direct more of your payment into paying off the principal on your debts versus just the interest. Aside from requesting proposals to your creditors, reputable credit counseling agencies may even provide you with a more manageable due date (or the time funds are taken from your account) that takes into consideration when you get paid.
The bottom line is, if you are struggling with credit card debts, you may have options when it comes to finding debt relief - regardless of whether that comes in the form of debt consolidation or debt settlement. So take the first step in finding out how you can get assistance with your debts and regain control of your financial freedom by requesting your free debt relief analysis and savings estimate today.