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Debt Cafe Resource Directory
Tuesday, March, 9th, 2010 |
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Credit Counseling
When you get so far into debt that you think you can never get out from under the rug, then think again. You do have some options. One to apply for a debt consolidation loan to pay off your debts and the other is credit counseling. The more preferable option is to consolidate your debts and get a fresh start without involving your creditors, but if your debt load is far greater than you can manage given your circumstances then credit counseling may be your next best recourse.
Credit counseling firms offer a range of services that include advice to debtors and suggested solutions to help consumers deal with serious debt problems. These suggestions often include making informal arrangements with creditors, consolidating debt in one loan, and in the most serious situations recommending that a debtor declare bankruptcy.
There are for profit and not for profit debt counseling services in the marketplace and the differences between them are in their fees structures, services offered, and the expertise and experience of their staff. Not for profit credit counseling firms tend to be cheaper but for profit companies often have more qualified staff. Either type will assist you well in getting out of a debt crunch in the fastest and most effective manner possible.
Usually the process will work by having an interview with your credit counselor after which they will access your situation and provide you with a report that outlines your current credit score or rating and begins to discuss your options for moving forward. If possible they will help arrange debt consolidation loan or provide you with a plan that restructures your debt under a credit counseling arrangement.
In this process the credit counseling firm will negotiate with your creditors on your behalf and convince them to take a less than the full amount of payment in return for a guarantee of payment. They then arrange a payment schedule for you that you can afford to pay and over a period of time you cancel out your debts and get a clean slate.
Related Resources:
Lending services
Find out what types of debt consolidation loans are available
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