Debt Management Credit Counseling ? A Legitimate Solution For Debt Relief

Written by admin on March 21st, 2011

The toll of increasing debt has forced many consumers to enroll for what is commonly known as a DMP or a program for debt management. Credit counseling is an integral part of the DMP, and is provided by counseling services or regular credit counselors, who are empowered by states for counseling credit. Debt management plans are principally, services that aim at reducing the debt of people who enroll at a debt management program.

In the United States the debt management services grew to quite some prominence after the second world war and after the 1950’s. Their prominence was further highlighted as a result of the introduction of credit cards in the credit market. These credit services were further highlighted as a result of credit reporting agencies and the economic recession of 2007 – 2010.

Debt Management: Credit Counseling Meaning

The credit counseling process basically, is an educational program, that aims at creating awareness about credit related services in consumers, who borrow loans and use credit cards. This session is a part of debt management programs. In many cases, credit counseling is also made a compulsory activity when people are filing for bankruptcy, or undergoing foreclosure or are planning on a short sale.

The credit counselors discuss with their clients, many issues regarding the debt that they have gotten into. Some key points that are dealt by the counselors include:
Credit Repayment Schedules: The credit counseling, debt management agency aims at successfully getting their clients out of debt. In the process, the counselors, sit down with the clients and explain how that is going to happen.
Fees and APR: The counselors explain to their clients the APR’s (Annual Percentage Rates) and the fees that are being levied and going to be levied on their credit cards and the loans that they have availed. There are several debt repayment plans and processes through which the counselors advise clients. With the help of which unnecessary APR’s, fees and interest rates can be avoided.
Manage and Calculate: Now, many counselors help you to manage your debt and control future finances. The counselor, in many cases, will advise you to shut down some of credit cards or consolidate your loans as there is a chance that you are paying through your nose at the moment. There are a considerable number of APR’s and fees that are variable and change without notice. Credit cards and loans with such facilities are expansive and your installment, in many cases, is bound to be quite high. Hence, the debt advice to shut down some of the cards and consolidate some of the loans. It will basically, help you to reduce the monthly bills.

On the whole debt management and credit counseling services will not only help you to settle your debts at the present, but will also help you to manage all your credit cards and loans in future.

Debt Management: Credit Counseling Advantages

There are some potential advantages of debt management and credit counseling. Some of the them have been listed as follows:
Debt management is a very important process that will get you out of debt with the least possible changes in your credit report and help you to avoid bankruptcy.
The second advantage of debt management, credit counseling, debt settlement programs is that your credit score and credit rating is not affected drastically, there might be a small reduction in the score.
Credit counselors are licensed by appropriate state authorities and the probability of a counselor being giving wrong advise is remote.

I hope that you are able to get the appropriate debt management, credit counseling and debt advice service. Good luck.

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