The Benefits of Consumer Credit Counseling

consumer credit counseling can relieve stress

In today’s economy, many people are struggling. The amount of available jobs is dwindling exponentially, and people have turned to loans and credit cards to make ends meet. It is completely possible to get in over your head. If you have an unexpected injury or illness, and have little or no insurance, you’ll be adding medical bills to this debt snowball and you may feel that you have no way out. There is no shame in this; it happens to even the most financially-savvy individuals.

The most important thing is how you handle unmanageable debt. You can always file bankruptcy, but this is a long, expensive and humiliating process. It also ruins your credit for at least seven years, and can cost you certain jobs for the rest of your life. If you ignore your debt, it won’t go away; it will only get worse. A debt with a few late charges can turn into a massive charged-off account with attorneys and collections agencies calling you non-stop. Eventually you’ll be facing a lawsuit that can drag you through the courts for years until you get it paid off. Not to mention that your credit will be absolutely ruined. The best approach is to handle it head-on. This can be a difficult process, which is why it is important to get a professional consumer credit counseling agency to help you.

A consumer credit counseling agency will sit down with you and make a comprehensive list of all your outstanding debts and monthly bills. They’ll figure out your monthly income and how much you can afford to pay on your debt. The debt counselor will then do all the legwork for you to get your debt to a manageable state. They will contact all of your creditors and work out payment arrangements that can include smaller payments and extended pay-off times.

Once you have a pay-off plan in place, you can begin paying off your debt each month until it’s gone. Some agencies require you to make the payment to them each month, and they dole out each creditor’s share themselves. Other agencies will let you pay your creditors directly, but they require some proof of payment.

Another benefit of using one of these services is that they can help you avoid creating any new debt. Most counselors will either close your revolving accounts, such as credit cards and charge cards, or have you do it yourself and provide proof of account closure. By removing the ability to make new charges, the temptation to create more debt is gone, and you’ll save yourself further headaches.

Consumer credit counseling services can help shoulder the burden and give you relief from the stress of debt, while helping you work your way free. If you are struggling to make ends meet, this can be your best option, and is worth further exploration.

photo credit: kharied via photopin cc

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