Debt Consolidation Counseling

During Debt Consolidation Counseling the Counselor will give guidance on many aspects of how to move forward from bad financial positions. The counselor may also take on the duty of Credit Management Advisor, should you want to go that far. This will be someone who will work out a plan with you to move you forward and get you back on a good financial footing.

Debt Consolidation Counseling will show there are both Advantages and Disadvantages in this process, below we have highlighted a few of each.

Advantages

1) Simplified Payments. You make one payment to the Advisors company and they in turn disperse funds to creditors. This takes a big load from you and allows you to stop dodging nasty calls from creditors.
2) Comfort and Relief. Someone is on your side and will take all the creditor calls and paperwork from you. This will bring you great relief.
3) Avoid Bankruptcy. By letting someone else take the strain and amalgamating your debts, you may find that it will not get as far as an individual creditor taking you to bankruptcy.
4) Reduced Interest Rates. Your Counselor may be able to consolidate your debts and negotiate a lower interest rate, which will save you money.
5) Know Where You Are. When this type of company takes over your distribution of debts, they will send monthly statements of exactly where you stand with each debt. This is very important in the process. It gives you a sense of control because you know exactly how everything is being handled.

Disadvantages

1) You are Making a Long-Term Commitment. Especially if your debt is a large one, it may take quite a while to pay off. You may be paying off your debts for a longer time than if you were paying them individually.
2) Additional Fees. You may well incur fees with such a company. It will be a small fee and to those who try it, mainly a fee which they are happy to pay for the peace of mind it brings.
3) Impact on Credit Score. Going down this route will probably, initially, impact negatively on your credit score. You will be paying each creditor less than they demand so you will feel an impact on the score. However, as long as you make your payments on time and as the individual debts fall off, your score will start to return to normal.

Debt Consolidation Counseling: Conclusion

Overall, Debt Consolidation Counseling is found by many to be a useful exercise. The Counseling will almost certainly lead to a Credit Management Company, where you will be able to get someone to deal directly with your debts and handle your creditors.

Doing this generally has a profoundly positive effect on people. It rids you of the day-to-day hassle of dealing with creditors and is often the first step on the road to your financial recovery and stability.

Debt Consolidation Counseling is never somewhere that most people ever envisage being, but when needed help like this is a great boon to helping you get back to a normal life.

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