Debt counseling is most often a process that is used in conjunction with other tools for the purpose of debt reduction through education, management and the utilization of various resources to lower and eventually eliminate credit card debt. In order to achieve this goal, a debt counselor will have a wide array of skills, knowledge and expertise, all of which can be leveraged by both parties to make the process of debt relief as smooth as possible. The use of some or all of these tools can help achieve financial freedom through the consolidation of debt.
Debt counseling can be accomplished at a low cost to the consumer, though it is also important to bear in mind that each company will charge a fee for their services. This fee is based on the amount of debt they are able to successfully negotiate with the credit card companies. The debt counselor is paid a fee by the client in exchange for negotiating the largest loan or settlement possible with the credit card companies. The debt counselor is paid this fee on a regular basis; typically once a month.
The best thing about debt counseling services is that they are usually available 24 hours a day. If you are having trouble paying your bills on time or simply cannot manage your debt, this may be an ideal solution for you. With the advent of the internet debt counseling services have been made available online; this means that you can easily log on to the website of your preferred debt counselor and communicate directly with them via a chat or phone call.
Debt counseling can be utilized for debt negotiation and settlement on credit cards or through unsecured loans. These counselors specialize in reducing interest rates and extending the payment term for customers who are facing difficulties with their debts. They can also work with credit card companies and arrange for a more affordable monthly payment, lowering the total amount you owe.
Debt counselors can work closely with your creditors, helping them to negotiate favorable terms and eliminate late fees and penalties. Often they are able to lower interest rates and fees by reducing the balances owed on your credit cards, or by changing the interest rate you pay. Even if you cannot afford to consolidate your credit card debt, these professionals can still help you get out of debt by negotiating with the creditors on a repayment plan which has the ability to bring your total outstanding balance down to an amount that you can comfortably afford each month.
Counseling programs are available at many local banks and credit unions. Credit unions are a great place to begin your search for a qualified counselor because these organizations often have a long-standing relationship with a wide range of financial institutions. Many of these credit unions will allow you to meet with a counselor on a one-on-one basis.
A certified debt counselor who is certified by the National Foundation for Credit Counseling and Practice (NFCCP) is recommended by the Better Business Bureau (BBB). These professionals are licensed, bonded and insured to provide quality debt counseling.
It is important to understand that these counselors are not legally allowed to refer any of your personal information to outside agencies such as creditors or collection agencies. This information is confidential, however, they can contact the appropriate authorities if necessary to collect this information for you.
If you decide that you want to pursue an online debt counseling service, it is very important that you research all of the counselors that you are considering. You can find many references on the web, but you need to contact a few of the professionals in person and ask questions to make sure that you are working with someone that you feel comfortable working with. Once you have chosen the person to work with, be sure to get references and proof of credentials from former clients.
The most important thing is to have an understanding of how you can go about paying off your debt, and the options available for you to avoid bankruptcy. You may want to explore some of the options available such as debt consolidation or debt settlement, both of which can help you get out of debt quickly, efficiently and without resorting to bankruptcy.
There is a reason that the NFCPP requires that counselors that work with individuals work with a minimum of four years of experience and that their counselors keep a minimum of 75 percent of the money that they earn in commission. The goal of these guidelines is to ensure that only qualified counselors are offering legitimate and effective counseling services, without the risk of harming a consumer’s financial future.