Climbing Out Of Debt With The Help Of Credit Counseling

Posted by Rana & filed under General Debt & Loan Consolidation Information.

Consumers living paycheck to paycheck are the first to admit that falling into credit debt is no laughing matter: Merciless collectors hounding them, a tarnished payment history haunting them, and the specter of bankruptcy looming before them. Economically-stranded consumers oftentimes lack the wherewithal and tools needed to create a workable budget and manage their credit card debt effectively. Credit counseling agencies help fiscally-out-of-shape borrowers regain their financial fitness. They enable credit card holders to achieve a debt-free existence by teaching them how to properly manage their finances and negotiating with creditors on their behalf.

The nation’s top two providers of consumer credit, debt reduction, and educational counseling that are making a palpable difference in borrowers’ lives are 1) the National Foundation for Credit Counseling (NFCC) and 2) American Consumer Credit Counseling (ACCC). The NFCC, which has been in existence for more than 50 years, has earned the most stripes in the credit counseling industry for furthering “a national agenda for financially responsible behavior”. Its members are non-profit organizations committed to furnishing low-cost and free services to individuals afflicted with debt, such as that arising from credit cards. As for the ACCC, it is a non-profit 501(c)(3) organization that provides debt-reduction guidance, debt counseling, and confidential credit management skills to borrowers nationwide. What follows is a synopsis of the financial counseling services that these two organizations deliver on a daily basis to borrowers:

Credit card debtors can avail themselves of the services of professional, certified counselors who will help them determine the optimal solutions for their individual needs. FCC members offer either gratuitous or affordable, comprehensive budget counseling to their clientele. The one-on-one sessions are private and confidential in nature and conducted either in person or via telephone or internet. Consumer credit counselors create a question and answer forum to address consumers’ debt issues and perform an objective analysis of the latter’s financial dossier and predicament. The counselors thoroughly review their customer’s budgets by examining income, liabilities, and assets and then proffering options as well as a debt-tackling plan. The average cost of personal budgeting counseling is $13.

NFCC counselors provide money management instruction to assist consumers drowning in credit card debt. By devising a customized plan for their clients, they offer concrete resolutions for their current financial situation and help them avoid further indebtedness. For borrowers who are considerably entangled in credit card debt, NFCC counselors will recommend enrollment in the Debt Management Plan (DMP), a monthly program that lowers consumers’ bills and combines them into one easy payment by means of a credit card consolidation. Basically, clients pay off their debt by submitting monthly deposits to the NFCC, which in turn disburses the funds to the creditors. Consumers who enroll in a DMP typically benefit from diminished collection calls and waived or reduced finance fees. It usually takes about 30 to 60 months to repay the outstanding debt through a DMP. The average monthly fee for enrollment in the NFCC’s DMP is $14, and the average start-up charge is $23.

The ACCC’s certified and professionally-trained counselors also offer premium evaluations of credit card borrowers’ financial circumstances. First, they assist customers in budget-creation and offer confidential education and counseling classes on proper budgeting and credit card usage. By analyzing their clients’ budget, ACCC counselors can decide whether a debt management program is appropriate for the former. Credit card debtors may take advantage of an online budget worksheet by consulting the ACCC’s website at

An ACCC counselor enters, on behalf of his or her client, into negotiations with lenders for a potential reduction of:

Over-the-limit charges and late fees

They also negotiate with creditors for an extension of the credit card debt’s repayment date. The ACCC has its own debt management program which enables consumers to simplify their monthly monetary obligations and to save money through lower monthly payments. If counselors determine that a borrower would benefit from a debt management program, they will place all the resources at his or her disposal, consolidate his or her payments and distribute them to the lenders. To enroll in the ACCC’s debt management program, consumers are required to pay a one-time processing fee of $39. The fee is waived for veterans, students, senior citizens, and individuals undergoing extreme hardship.

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