Do You Need a Debt Consolidation Counselor?

If you’re swimming in debt that you can no longer manage, you may need the help of a reputable credit counselor for debt consolidation counseling. Runaway interest and penalties can make it impossible to meet minimum monthly payment requirements, particularly if you have more than one credit card. Add a mortgage, car payment, or student loan into the mix and it can seem like there’s no way out.

What does a credit counselor do?

A credit counselor's job is to provide a solution for people whose debt has reached critical mass. You may be receiving regular unpleasant phone calls from creditors and have reached the point where you simply can no longer cope with the situation. Credit counselors are trained to find a way to help you and take the pressure off. The solution comes in the way of a Debt Management Program (DMP) the counselor creates. These programs are usually not free, but the right DMP — and the right counselor — can significantly reduce your monthly payments and allow you to recover from debt.

Negotiating with credit card companies

As part of their service, credit counselors will do the negotiating with your creditors. They will put together a program that is agreeable to all parties involved, allowing you to make just one payment each month. The credit counselor then takes that payment and distributes it between all of your creditors per the agreement. The pressure will ease and unpleasant phone calls from creditors will become a thing of the past.

Does everyone with too much outstanding debt need credit counselor?

Not everyone needs a credit counselor. Some kinds of debt can be solved with less drastic measures. For instance, if you carry debt on several credit cards but have a large balance on one particularly high interest card, you may be able to transfer that balance to a different, low interest card. Even with your other debts, this action alone could reduce your monthly burden enough to ease the problem.

If you’ve determined that your situation does call for a DMP, you can get started by choosing a debt counselor. Check online with the National Foundation of Credit Counselors (NFCC) and the Independent Association of Credit Counselors (IACC) to find a certified counselor.