How a Debt Counselor can help you
Your debt counseling agency may offer services such as counseling, a debt-repayment plan and budgeting advice. Your debt counselor may set up a one-pay plan for you or negotiate down your debt.
Your debt/credit counselor may work with you to put together all of your bills, figure out how much you owe and how much you can afford to pay each month. Then you will write one monthly check to your debt counseling service who will distribute the money. Using this method you will start paying down your debt while still having enough to live.
After a payment schedule is set up the counselor will talk to your creditors and ask them to reduce your interest rates or waive late fees. They may also ask to have your account “re-aged.” This means they will report past dues as current.
Most creditors will be happy to work with you. They would rather have you pay down your debt, no matter how slowly, than declare bankruptcy. So why can’t you call and ask them yourself? You can! You can call and try to set up your own repayment plan and get your interest rates lowered but credit counselors have relationships with creditors and will most likely be more successful.
This is definitely a case of the more services, the better. A debt counselor should be able to:
- Stop collection calls.
- Lower your interest rates.
- Consolidate credit card bills into one manageable monthly payment.
- Eliminate late fees and over-limit charges.
- Build a realistic budget and financial plan you can follow.
