Consumer credit counseling (CCC) is the same as debt management.

Actually, credit counseling is usually a nonprofit organization, which is basically a collection agency for the creditors. Their only function is to see how much you can pay and to get you signed up on a program. The creditors are willing to reduce the rate on the cards if someone is with this program. It does reduce the monthly payments and does consolidate the debts that they are allowed to include in the program. This program will hurt your credit in the short run but will get you out of debt in 4-6 yrs. It does not consolidate all your debt.

Debt management programs are a good way to consolidate.

“Debt management program” is a new term that is floating around and could mean anything.  It could mean CCC, debt settlement or even a loan. For people who cannot qualify for CCC and may be considering bankruptcy, debt management may be an option to explore. This is where you choose to stop making payments on all your unsecure debts and a settlement company helps you get your debt paid off over time. You pay them monthly and they hold your money till they get a good settlement.  One company that I would recommend is New Beginning. They can be reached at 434-455-0080. They work in all states and are an attorney-based company.

Credit counselors can cut your monthly payments in half.

Each person’s situation is different.  No matter what program you use make sure you get a contract that you are fully comfortable with and understand the companies fee.  Nobody works for free. You may see some interest reduction but there are no magic words that will cut your bills in half. This is simply a good way for companies to advertise. In debt settlement programs it is actually possible to end up paying half of what you owed depending on the age and type of your debt.

A consolidation loan is a good solution.

There are secured loans and unsecured loans. Secured loans use something of value for security and could include your home, your car or maybe even your boat. The home loan may be the best solution but you have to qualify. For more information contact Jay. Most other loans will have a higher rate and payment. Basically, your payment to balance ratio needs to be reduced to see any benefit from a consolidation loan. Mortgage debt has the lowest ratio.

Bankruptcy isn’t the end of the world.

Bankruptcy isn’t the end of the world and it’s a lot better than having no food to eat and no roof over your head. Sometimes it is the best thing. It is also a debt consolidation if you end up getting a Chapter 13 BK. Keep in mind bankruptcy will stay on your credit for 10 years. This doesn’t mean you can’t survive the ordeal but it also doesn’t mean it isn’t a serious situation. You can get through it and your credit will recover.

Jay A. Kumar

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