What is debt relief?
If you are one of the millions of Americans suffering from the credit crunch going on in the country right now, there's a good chance you're looking for some debt relief. But before you go out looking for it, it's important to understand what it is and how it works. Debt relief comes in many forms, including debt consolidation, debt negotiation, credit counseling and debt management programs.
However, it's important that you choose the right option for you. More importantly, you need to understand what type of person you are. Debt consolidation and debt negotiation are great for the go-getters who want to attack their debt head-on and do it on their own. Not everyone is built like this though.
How debt relief helps
Debt relief is a great way to start working yourself out of debt. This clip explains one way debt relief works.
Video: Debt Relief Management Tips - How to Get Out of Debt
Deciding whether or not you need a credit counselor
Many people have differing opinions on credit counselors. In essence, a credit counselor is a person who helps you work through debt and credit problems. But many of the solutions are things you could do on your own. Some naysayers will argue that you should forget about hiring a credit counselor and instead seek debt relief through your own means. But this is often easier said than done. Getting debt relief can be confusing at times. And even if you can do it on your own, there's a good chance you'll become frustrated at some point. In these cases, a credit counselor is there to show you how to pay off your debt and budget your money properly. It's important for you to make your own decision and decide whether or not a credit counselor is right for your situation.
Using a debt management program
If you do choose to obtain a credit counselor to help you with your debt, they will introduce you to what is called a debt management program, or DMP for short. A DMP is a program that helps pay down your debt over the course of time. However, rather than paying each of your creditors directly, the credit counselor does most of the work for you. He or she contacts your creditors, works out payment plans with each of them and tries to lower any interest rates attached to your debt. You then pay the credit counselor every month and let them handle the individual payments to creditors.
How to prepare your personal debt management program
In order to create a debt management program, you'll need to work with a credit counselor and follow these simple steps to get started:
- Find a good credit counselor: Most credit counseling agencies are non-profit companies. However, there are some that will charge you for their services. Avoid paying any upfront fees and look for someone who asks the right questions about you and your debt.
- Collect your information for your credit counselor: Go through your records and find out exactly how much debt you have. Make sure you include the status of each debt, the names of your creditors, your interest rates and the amount of money you currently pay every month.
- Have your credit counselor contact your creditors: You'll need to make sure your creditors allow debt management. Also, your credit counselor can speak to your creditors about lowering your interest rates and getting you a lower monthly payment.
- Make sure you understand how the DMP process works: You'll need to make sure your credit counselor is prepared to pay your creditors on time and avoid penalties. You also need to make sure the DMP works for your budget. Before you start, understand the process.
- Start paying off your debt through your DMP: Continue to budget your money properly as you pay off your creditors.
The advantages of credit counselors
This video clip explains how a credit counselor can help you and also shows you how to go about choosing one.
Video: How to Choose a Credit Counselor
Be careful choosing a credit counselor
Anytime you decide to seek help with your credit, you need to be careful. Help is always just a phone call away. But be sure you're selecting the right person to help counsel you about your credit. They need to be willing to take the time to understand your situation. Start by speaking with one of these local credit counselors about seeking a new debt management program:
Credit Advocate Counseling Corporation
New York, NY
212-260-2776
By Design Financial Solutions
Los Angeles, CA
800-750-2227
Dun & Bradstreet: Credit Services
Seattle, WA
206-728-8900
Financial Solutions Credit Repair
Houston, TX
281-889-6033
Credit Consultants Inc.
Philadelphia, PA
215-789-9451
Credit Alliance Group
Dallas, TX
866-454-5044
Credit Doctors of South Florida
Miami, FL
305-577-1030
Southern Management Systems
Orlando, FL
407-895-7100
Creditor Resources Inc.
Atlanta, GA
678-402-2100
Credit Plus
Oklahoma City, OK
405-603-7587
Myrs Credit Advisors inc.
Kansas City, MO
816-421-1919
Christian Credit Counseling
Memphis, TN
901-682-3400
Garden State Consumer Credit Counseling
Freehold, NJ
732-409-6281
Er Credit Counseling
Cleveland, OH
440-888-7991
Total Debt Solutions LLC
Salt Lake City, UT
801-355-1243
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