If you find yourself knee debt in excessive debts and cannot find any way to get out of this critical financial situation, you can take help of consumer credit counseling service and avoid declaring yourself bankrupt.
What a credit counseling service is ?
In order to manage your debts, you need to enroll yourself with a consumer credit counseling agency. After that, the representative of the agency will analyze your financial situation and help you to prepare a financial budget for you, based on your monthly income and expenses.
The representative will also contact your creditors and negotiate with them to lower your repayment amount, according to your affordability. He will also ask your creditor to waive off fees for late payments and over limit charges.
Types of debts covered by this service :
Generally, the most common types of unsecured debts which are covered under a credit counseling service are:
Unpaid credit card bills
Unpaid medical bills
Unpaid dental bills
Student loan
Personal loan
Attorney bills
Unpaid utility bills
Unpaid rent
IRS tax debt
Benefits of a credit counseling service :
The advantages of a enrolling yourself in a credit counseling service are:
Getting help in preparing a budget: The representative of the credit counseling agency will help you to prepare a monthly budget for you, on the basis of your monthly income and expenses, so that you can save more and pay off your debts within a shorter period.
Affordable single monthly payments: The representative will negotiate with your creditors on your behalf, to replace your multiple debts with a new single consolidated loan, at a lower inetrest rate, so that, you will not face any difficulty in making the monthly payments.
Re-rating of delinquent accounts: Prior to enrolling yourself with a credit counseling service, if you were already delinquent, then, after making several payments with the new repayment plan, you can re-apply for your delinquent accounts to be re-rated.
Shorter time to pay off debts: As you will have to make a single monthly payment, you can save more and in addition to the minimum payment, you can pay extra to pay off your debts faster. In this way, you will be able to repay your debts within a period of 4 to 5 years.
End of harassing calls: Once you have enrolled yourself into a credit counseling service, your creditors will stop making harassing calls to you. If any creditor continues to do so, you can take legal steps against him.
However, you have to consider the fact that, once you enroll yourself into a consumer credit counseling service, it will have a negative effect on your credit report. You need to find a reliable and authentic company , so that you can get out of debts and have a control over your financial life.