Will Credit Counseling Help You?
Many individuals in New Mexico and across the United States are over their heads in debt, suffering and in need of relief from credit cards and other unsecured debts, such as retail store cards, gas cards, medical bills and even utility bills. If you're in debt, you may be seriously considering credit counseling, or any of a number of alternative debt relief options, bankruptcy included. In fact, if you you are considering filing for bankruptcy due to a serious level of debt, the law now requires that you undergo credit counseling prior to doing so.
Any consumer credit counseling program really has two main objectives: 1) To educate consumers on budgeting, credit, and debt management and 2) To help the consumer "consolidate," or combine, the entire amount of their credit cards and other unsecured debts into a single, more affordable and manageable monthly payment. Through the benefits of debt relief, such as lower interest rates and the waiving of late fees and penalties, a debt management plan (DMP) coordinated by a credit counselor or debt counselor can help consumers get out of debt faster than they could on their own if they continued to struggle with monthly minimums at a higher interest rate. Credit counseling programs, if followed faithfully, can not only simplify a consumer's finances, but also save them a significant amount of money and stress. Most importantly, they can help establish the mindset and discipline necessary to stop the debt cycle and put the consumer en route to a solvent future.
If you need to explore your debt relief options due to a financial hardship, you can get your free debt relief evaluation and savings estimate at no obligation.
How Credit Counseling Works
Certified credit counseling or debt counseling is provided through credit counseling agencies and offers a variety of helpful debt relief services for individuals and families. These services include assessing an individual's unique debt circumstances, budgeting, financial education, and in many cases, providing consumers with the means necessary to help oversee their finances and pursue the dream of financial independence and a debt-free future.
Debt Management Plan Benefits
A credit counselor or debt counselor may also help provide debt relief by working with debtors to establish a debt management plan, also known as a DMP. Debt Management Plans could provide debt relief by:
- Reducing interest rates
- Lowering monthly payments
- Waiving late fees and penalties
- Consolidating or combining debts into a single, more manageable, monthly payment
- Helping you save considerable money and allowing you to get out of debt in less time than you could on your own if you didn't have the benefits of lower interest rates and continued to pay only monthly minimums
Alternative Debt Relief Options
Credit counseling is a proven method for debt relief that has helped many individuals and families in New Mexico, but it's important to know that debt management requires basic discipline and restraint to avoid credit cards. It normally takes three to five years to complete the program and realize the full benefits of debt relief. On the other hand, an alternative to debt management is debt settlement, a more aggressive form of debt relief that could help you payoff credit card debt faster, assuming you can accrue money in a "set aside" account which can later be used to extend a settlement offer to creditors.
With debt settlement, credit card companies may agree to settle for a lesser amount rather than receive little or nothing from consumers in distress who may be looking to pay what they can to help avoid bankruptcy. In reality, when a consumer falls 60 to 90 days or more behind in payments, credit card companies may choose to "sell off" the debt to a third party collector or collection agency as "bad debt," possibly for as little as 10 cents on the dollar. From this angle, it makes sense that a credit card company might be willing to settle for considerably less than the full amount owed from a consumer who is facing a serious financial hardship and truly does need relief from high balance credit card debt.
It's true that debt relief programs help many Americans during times of financial hardship, but some people may also benefit from state-assisted programs and services to help them pay for utility bills, grocery bills, or childcare. The state of New Mexico has a variety of financial assistance programs available, to learn more about these resources, go to the state's Human Services Department official page Looking for Assistance section.
To see what debt relief could do for you and how much you could save, take a moment to answer a few basic questions so that we can connect you to a BBB-accredited debt relief provider who may assist you. Before enrolling in any debt relief program, it is important that the consumer clearly understands how much debt relief can potentially save, how long it will take to realize those savings, and the setback that any debt relief program could have on personal credit and taxes.
To learn what debt relief could do for you and get an estimate of how much you could potentially save, take a moment to answer a few questions online and get your free debt relief estimate and savings analysis - at no cost to you.