Archive for March, 2008

What Exactly is Consumer Credit Counseling?

There are many different meanings for the term consumer credit counseling.

In it’s simplest form, credit counselling is the process where you meet with a credit counselor and they give you advice on managing your money. They will help you deal with credit card debt, and they will explain how to improve your credit score on your credit report.

In addition, if you are planning to file for personal bankruptcy in the United States, they will conduct the mandatory credit counseling before filing bankruptcy, and the post bankruptcy filing credit counseling session. In Canada, the credit counsellor will conduct the credit counselling during the bankruptcy process.

Finally, a credit counselor will actually negotiate with your creditors on your behalf through a Debt Management Program where you make one payment each month to deal with your debts.

For more information, consult a local credit counselor.

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What’s the difference between credit counseling and a Debt Management Plan?

Consumer credit counseling refers to advice you get from a credit counselor to help you deal with your debts. Your credit counselor may advise you to get a debt consolidation loan, or they may help you with budgeting to pay off your debts on your own.

If you required more help, they may recommend a Debt Management Program where you make one payment each month to deal with your debts.

In a debt management plan the credit counsellor negotiates the settlement on your behalf, and your debts are repaid over a period of time. In other words, a debt management plan is one of the services provided by a credit counselor on your behalf.

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