Why Credit Counseling Won’t Work for Most Debtors

Consumers search out credit counseling because they believe that they’re in over their heads when it comes to their credit and debts and need some form of debt relief. They buy into all the propaganda that claims to “cut down your payments in half” or “make one low monthly payment.”

The Lower Payments Myth
While credit counseling declares that they will lower your monthly payments, the drawback is that this is done over a longer period of time. While the payment each month is less, the interest that you’re likely to be accruing just adds up to the same total amount in the end.

Are You Too Far Gone for Credit Counseling?
Credit counseling may not even accept you for one of their debt relief plans if they consider you “too far gone.” They will suggest that bankruptcy is probably your only viable option.

Do You Have the Right Kind of Debt?
As credit counseling is primarily funded by credit card companies, their plans deal almost exclusively with credit card debt. If your debt is from any other arena – medical debts, mortgages, personal loans – credit counseling almost certainly can’t help you.

Are You Ruining Your Credit Score?
The debt payment plans implemented by credit counseling are more likely to hurt your credit scores than to improve them. By re-aging past debts these derogatory accounts will continue to be listed on your credit reports until you are done with payments, and then for 7 years on top of that.

Credit counseling is only advisable for those who need one or two problems resolved. They may need one counseling session and they’re all done. This knowledge could’ve been learned by skimming the web for an hour. Significant debt relief solutions should be able to adapt for consumers that have one outstanding debt to those that are considered “too far gone.” Debt relief should not differentiate between helping you pay off one simple debt or helping you avoid a bankruptcy. You may want to consider debt settlement as an option