More and more overextended consumers these days are seeking a solution to their debt problems. These consumers know that they must do something to address this situation, but most simply just do not know how to go about doing it.
Credit counseling (also commonly known as debt management) is one of the two most popular forms of debt relief. Many people who enter such a program are unaware of the potential ramifications it presents. Many credit counseling companies are for-profit organizations looking to bleed the last few dollars out of heavily indebted consumers. A lot of times all they do is leave the consumer with an unfulfilled promise to clear up their debt.
What credit counseling companies don't want you to know is quite simple: they work directly for the creditors you owe money to. They are paid by these same creditors in effort to ensure you pay back the full principle balance on your debts. Creditors are more than willing to do this because they know that they may eventually be forced to settle for less than the full amount on these delinquent accounts. Credit counseling companies thrive on your dire situation as they charge you a fee to simply reduce your interest rate. They also reserve the right to drop you from the program if you were to miss even one payment to them. If you look at a recent statement from one of your creditors, you may find that there is a contact number to a credit counseling company directly on the statement. Why you ask? Because the credit card companies want you to pay back the full principle balance, plus interest, even if you are struggling!
Most people in debt do not realize that they are in a prime position to negotiate with their creditors to reach a settlement agreement on their delinquent accounts. Once an account goes past due, credit card companies are more inclined to accept less than what you owe. In exchange, they agree to change the status of that account to "settled in full" on your credit report. A settlement requires you to come up with a lump sum of money but offers you an opportunity to get out of debt faster than you ever imagined.
It is advisable to weigh all of your options when considering seeking help with your debt. Does it make sense to seek help from the same folks that have done everything in their power to keep you in debt? Or should you hire a national debt service company to help you in a less costly, time efficient, manner...