Debt Consolidation Counseling

Credit counseling companies provide individuals with the information and tools they need to better manage their financial assets. Financial counseling services work with individuals to evaluate their current financial health and provide debt consolidation assistance to move individuals toward a debt-free future. If someone is struggling against an ever-increasing tide of bills, hiring a counseling service to assist with debt might provide just the professional help that is needed to break they cycle of financial burdens.

Consumer credit counseling services will confidentially evaluate a consumers current financial situation and assess whether you are a good candidate for consolidation or other debt reduction strategies. Debt consolidation takes all of an individuals current debts and rolls them into one large loan at a lesser interest rate than the individual creditors are likely charging. Counseling services will evaluate the current level of debt and, working with the consumer, come up with a reasonable amount that can be paid monthly toward these obligations. Typically, a counselor can reduce the total monthly debt payout by as much as 40%-60%. Should the individual choose to then enroll with the financial service company, they will then represent the consumer to all creditors.

As part of a consumers advice on debt consolidation and reduction plans, the organization or representative will contact all creditors and inform them of enrollment. Using the money the consumer has paid monthly as part of the consolidation plan, they will begin working with each of these creditors. They will negotiate debt with that creditor and come to an agreement until all obligations have been cleared. These credit counseling services do charge a fee depending upon the complexity of the financial situation; however, the potential savings they net the individual by negotiating typically covers their services. As a rule, non-profit counseling services charge lesser fees than for-profit agencies.

Many people have never been taught how to manage their money and live within a budget. Consumer credit counseling services also provide education sessions on topics like creating a budget and using credit properly. The goal of counseling services is not only debt consolidation and elimination, but also to teach a person how to better manage personal finances so that they might continue to live debt-free. Other services often provide free credit reports, analysis and educational information on building credit, buying a home, and building a solid financial plan. Working with a counselor can help a person to conquer debt and place them on the road to financial freedom. "He that trusteth in his riches shall fall: but the righteous shall flourish as a branch." (Proverbs 11:28)

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