Credit Counseling Vs. Deb Management Programs – What Option Is Best For You?

The main aim of debt management services is to ensure that people under the burden of heavy debts

, who are finding it difficult to repay the ever mounting debts, due to reasons such as insufficient domain expertise or defects in their credit management, get a well planned and easy repayment schedule. The credit or debt counselors working in debt management services companies, who have recognized certifications, decide effective plans and strategies to clear the debts. Given below is the detail explanation of the process of debt management which is carried out by the debt management services agency.

The Process of Debt Management

The two vital steps involved in the debt management services provided by debt management companies are credit counseling and getting a debt management program. Let us discuss these two steps one after the other to understand them better.

Credit Counseling

The first step taken by debt management services is credit counseling which is imperative if you want to file for bankruptcy. As a rule, you will have to approach the debt management services agency at least one hundred and eighty days before the day you actually file for the bankruptcy. Only in some cases, when there are situations due to which you cannot do the above thing, that you are exempted from credit counseling sessions with the debt managers. The suggestions regarding debt settlement given during the credit counseling sessions will help those who are planning to file for bankruptcy. The bankruptcy court should be given all the details of the debt repayment suggestions given in the credit counseling. The debt management services provide guidance on how to increase your savings for your own benefit, planing and maintaining your daily household budget and other expenses, and also on finding ways for debt repayment.

Getting a Debt Management Program

The process of debt management cannot be complete unless a debt management program is sanctioned as per the guidelines and rules laid down during the credit counseling sessions. The Equated Monthly Installments (EMI's) are generally reduced to lessen the monthly payment obligations or burdens on the people who are finding it difficult to repay huge debts. There is another procedure about debts, which may be implemented and that is the re-aging of the account as a current account. This procedure does not reduce the amount of debt to be paid by the person. The re-aging can be done if the people, whose debt is to be managed, pay the EMI's of three months, either one after the another or in a lump sum way. However, due to this solution, you will not be eligible for getting new line of credit or loans. The summary of this entire process is that a new line of credit, which can also be called as debt consolidation of loan, is made available to the debt ridden people. Debt management by these services providers help to reduce burden on people by forgiving the late fee charges and other fees.

The debt management services concentrate equally on re-aging and debt consolidation. The re-aging slowly and surely helps you in improving your credit scores. The debt management services are available for people if they default on the payments of the monthly installments for a period, which is more than five months. The credit rating received after consolidation of loan is R7 OR 17 which is much better than that offered for the bad debts. You could try consulting industry experts for some useful tips on credit card debt consolidations.

Debt Management Service Providers

After understanding the process of debt management by the services providers, now, let us know who they actually are. The National Foundation for Credit Counseling (NFCC) and members of the NFCC such as Consumer Credit Counseling Services (CCCS), will help you solve your debt related issues. Debt settlement programs for assistance of common public are provided by the American Debt Enders. This company will negotiate the interest rates on your behalf and will protect you financially in all possible ways. There are some non-profit debt management services as well as online debt management services, which you could search surfing the Internet.

Credit Counseling Vs. Deb Management Programs What Option Is Best For You?

By: Clyde Archer

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