Credit Counseling – An Effective Debt Relief Option | Birmingham AL

Millions of Americans are now facing debt problems. There are several debt relief options available, such as credit counseling, debt negotiation/debt settlement, debt relief loan, bankruptcy and several other debt relief options. Before going to consider any option, it is important to thoroughly understand each option and then choose the option that is right for you.

Credit counseling:

Credit counseling is one of debt relief options for consumers who are experiencing financial problems and unable do their minimum monthly payments. Most firms offer these services that are particularly a means to make one payment directly to the counseling agency, which then distributes the money to the creditors.

Usually a credit counseling agency lowers your monthly payments by giving concessions on the interest rate from creditors or lenders. Credit advises can solve financial problems to a great extent. You should understand the fact that even you seek counseling, you still pay 100% of your debts, but with less monthly payments. Usually, these counseling program takes about five years. Undergoing counseling doesn’t not affect your credit report, but enrolling in this debt management may appear on your credit report. Most lenders consider credit counseling services like filing for chapter 13 bankruptcy or using a third party to reorganize the debts.

A good credit counselor can provide a great deal of assistance. But you need to do your work before you can end up with a credit counseling agency that will take advantage of you.

Who benefit from credit counseling?

• People who cannot make minimum monthly payments on a timely basis can benefit greatly from credit counseling agencies.

• Credit counselors help with unsecured debts like credit card debts, personal loans or bills for medical care.

• People who have difficulty with secured debts like car loans or home mortgages or insurance bills or payments due for utility services. But credit counselors consider your entire debt load while generating a budget and repayment plan.

• People who are at risk of foreclosure or repossession, they can assist or advise you on how to contact the lenders and get additional time for you to catch up on your late payments.

• If the credit counseling agency negotiates your debts, then make a budget plan that help you stay on top of the obligations. They provide you appropriate debt management services that will benefit in debt relief.

• In case your economic position is beyond this kind of debt management services, then you need to take help of bankruptcy.

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