subject: Debt Relief Options – Consolidating Debt Vs. Credit Counseling [print this page] A credit card counselor can usually negotiate a lower rate or payment if you can't. You will be able to pay off your debt faster with the money you save. You can also plan a budget to repay your debt and also still have some money left for other things if the counselor helps you.
The Cons One problem with credit counseling is that it sometimes does not result in a monthly payment that the client can afford. Creditors are only willing to negotiate so far, and if you owe a lot of money you may not be able to afford the best deal they will give you. If that is the case, you'll have to either find another means of paying your debt or consider bankruptcy.
Credit counseling services charge fees that are added to your monthly amount. If they don't do this they will usually obtain the money from your debtors as a part of your payment.
There is some debate as to how going through credit counseling affects your credit. It is noted on your credit report. In most cases, you can't get new credit until you complete the program. But it could also affect you after your debts are paid off. Many lenders consider credit counseling as being similar to Chapter 13 bankruptcy.
Check out a prospective counseling agency first. Just because they deal in credit counseling, it doesn't mean that they are all honest. The Better Business Bureau can help you with this.
It's important to weigh the pros and cons of credit counseling. You may not need to involve another party if you just take the time to work with your creditors first.
Debt Relief Options Consolidating Debt Vs. Credit Counseling
