When do I know I need debt and credit counseling?
There is no specific amount of debt -- whether it's $5,000 or $150,000 -- that denotes you need debt and credit counseling.
You need to consider how much income you have each month, what your expenses are and what your financial plans are.
If you can plan a way to get out of debt yourself, that may be your best bet. If you feel helpless, overwhelmed or can't figure out a plan, you may need debt counseling.
How do I find a good debt counselor or credit counselor?
When shopping for help, either for a credit counseling agency or a debt consolidation agency, keep in mind that just because a company claims to be nonprofit, doesn't mean it has your best interest at heart. Be wary of a company that immediately urges you to join a debt management plan -- they should take an interest in your particular issues, not throw you toward a cookie-cutter plan.
Debt Counseling and Debt Settlement
A debt settlement attorney specializes in negotiating with creditors to reduce the amount of debt the individual must repay. They will contact each one of your creditors and each collection agency to stop the late fees, penalties, and premiums building up on all accounts.
The debt settlement attorney will establish agreements so that the credit card companies and collection agencies will contact the attorney instead of the consumer. It is also the responsibility of the debt settlement attorney to obtain the consumers credit report and work to remove any misleading, unsubstantiated, or incorrect items. This is a very important service that should be utilized by the consumer to restore credit ratings and create a plan for future financial management.
Using a debt settlement attorney is vastly different from credit counseling. It can be risky to your credit, but if your credit score has already lowered you may have little to lose and more to gain by settling outstanding debt. Debt settlement is much more aggressive than credit counseling, and it can get you out of debt in half the time of credit counseling.
Debt counselors and credit counselors generally work for the credit card companies, while debt settlement attorneys work for you to reduce your balances and payments.
Call us at 1-888-502-3907 for a free, no obligation debt and credit counseling session to help determine which option is best for you.
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