Much like it sounds, Credit Counseling is where a 3rd party debt management professional fully reviews your financial situation. Then, they work with you and the Debtors to map out the quickest and least painful way out of debt. In most cases, they will provide you with the advice and counsel you need to avoid getting into trouble again.

• Reduction in Interest Rates: One of the primary goals of a Debt counselor is to negotiate with the Debtors for reduced interest rates. This ultimately helps you pay off your debts faster and for less.
• Lower Monthly Payments: The lower interest rates will lead to lower monthly payments and give you some much-needed breathing room in your budget.
• End Late Fees/Over Limit Fees: One of the biggest reasons that debts spiral out of control are the late fees/over limit fees that can cause minimum monthly payments to skyrocket. The Debt counselor often works with your Debtors to end the late fees/over limit fees where possible to "stop the bleeding" and help you pay off your debt.
• No More Harassing Phone Calls: By negotiating repayment plans with each Debtor, the harassing phone calls will stop so long as you make the agreed upon payments. This is a tremendous stress relief for many and a large advantage to Debt counseling.
• A Clear Plan To Becoming Debt Free: Simply knowing that there is a plan in place and a clear path to becoming debt free can be a huge relief for someone drowning in debt. The Debt counselor will help you create a map to being debt free while also advising you on how to avoid repeating the mistakes that got you into financial trouble in the first place.

With Credit Counseling, your overall debt burden will not decrease but it will help you pay that debt down faster. Also, there will be some fees assessed for the services provided by the Debt counselor. In most cases and for anyone with more than $10,000 in unsecured debt paying 15% or more in interest charges, the fees often more than compensate for the savings.

Finally, when you enroll in a Credit Counseling program, your Debtors will likely note this in your Debt report. Some will view this in a positive way as they see you are taking your debts seriously and doing something about them. Some, however, will regard this action negatively as they see you are having problems paying your bills on time. Your Debt counselor may be able to negotiate with the Debtors not to negatively impact your Debt rating in return for adhering to the repayment plan so be sure to bring up when you speak with them!