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At Solvable, we understand that getting out of debt is not easy; we care about your financial well being and are here to help. We are committed to helping everyday Americans get into a better financial position by providing them the guidance, tools and community they need to be successful. Some of the links in this post may be from our partners. Opinions are the author’s alone.
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You can find consumer credit counseling services from independent agencies certified by the National Foundation for Consumer Credit.
Credit counselors can help you with budget planning or a debt management plan to help you pay off your debt.
Initial consultations with counselors are often free and can be done by phone, online, or in person.
Dealing with debt on your own can be very difficult, especially if you owe a large amount of money. Although there are many ways that you can get out of debt, seeking Consumer Credit Counseling Services (CCCS) from an accredited agency is one of your best solutions.
CCCS can help you get your finances in order so that you can pay off your current debt and avoid going into more debt in the future. Here are a few things you should know about CCCS if you’re looking for a way to deal with your debt.
Credit Counseling Services History
While it may seem hard to believe, using credit cards wasn’t always a fact of life. When credit cards were first introduced, not many people understood what they were or that using a credit card incorrectly could result in a tremendous amount of debt. In response to this new invention, the National Foundation for Consumer Credit (NFCC) was formed in 1951.
The NFCC was originally founded to promote financial and credit literacy among the population, but their services soon expanded. In particular, the NFCC started offering credit counseling services across the country.
Consumer Credit Counseling Services agencies have been certified by the NFCC and operate similarly to an independent franchise of any other large business. Agencies that offer CCCS are independently operated but are members of the NFCC, which both certifies individual counselors and provides educational materials.
Every CCCS that you visit is also a 501(c)(3) nonprofit organization. This is very beneficial to those dealing with credit card debt, as it means the counselor is motivated to help the client get out of debt instead of making a profit.
What Happens in a Credit Counseling Session?
When dealing with large amounts of debt, it’s common to worry that you’ll be judged if you seek assistance. One of the main purposes of a CCCS is to provide consumers with a judgment-free environment where they’ll be able to receive the support and advice they need to get out of credit card debt.
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When you visit or call an agency that provides credit counseling services, you’ll take part in a consultation with a counselor who has been certified by the NFCC. The length of your session will depend on the complexity of your financial situation. Your session will involve several different steps, including:
A review of your debt and finances
Advice from the counselor for getting out of debt
Development of a workable budget that will help you avoid further debt
Every person’s debt situation is different, which is why creating a realistic budget tailored to your lifestyle is important. By following the budget given to you by your counselor, you will hopefully be able to achieve several different goals:
Pay off your debt
Improve your day-to-day finances
Build savings for a more stable future
Your credit counseling session is free of charge and is not binding in any way. The only goal is to give you a solid plan to help you get out of debt and stay debt-free.
Agreeing to Debt Management Plans
One of the biggest benefits of visiting a Consumer Credit Counseling Service office is the opportunity to arrange a debt management plan. The primary purpose of a debt management plan is to consolidate your debt payments and your unsecured debt into a single payment.
Having only one monthly payment should be much easier to manage; you won’t have to keep track of multiple payments to multiple creditors. Debt management plans also have several other advantages over trying to handle your debt yourself.
The monthly payment you make as part of your debt management plan may be reduced from what you would pay your creditors individually. You may also be able to lower your interest rates.
In general, a debt management plan will take between three and five years to pay off, depending on the amount you owe and how many creditors you have. While this may sound like a lot of time, it could take decades to pay off your credit card debt if you continued to make only the minimum monthly payments on your cards.
Getting the Most Out of CCCS
If you’re interested in arranging CCCS and want to get the most out of the process, there are a few steps you can take. It’s a good idea to do a little legwork before your consultation. In particular, you should get your financial information in order so you don’t have to take time away from your session searching for a specific document. Some of the information you may want to gather includes:
Credit card statements
Loan information
Details of your monthly expenses
Income information
You also need to make sure that you set aside enough time for your counseling session. Trying to rush through a session or ending it early because you have other commitments is never a good idea. In general, you should set aside an hour to an hour and a half for your session.
Should You Seek CCCS?
Virtually everyone can benefit from CCCS, even those who are not currently dealing with debt. CCCS agencies will usually offer financial planning services that can be useful for those who want to live their lives debt-free, and the agency may also be able to give advice for dealing with several different types of loans, including student loans.
CCCS are particularly useful for those struggling with debt. With aid from your counselor, you should be able to get your finances in order, pay off your debt, and work towards a more stable financial future.
When you’re living with debt, you may need professional help, and Solvable is here to connect you with some of the best debt relief companies in the country. You can read our reviews to decide which debt relief company is right for you and review our articles to learn more about different solutions for clearing your debt.
The offers that you are matched up with are from companies or attorneys/law firms that we may receive compensation from. Based on our initial review of such companies or individuals, we feel comfortable introducing them to our readers. We won’t recommend something just because we’re offered payment to endorse or promote it. However, we do recommend that you shop around and compare services and costs with other companies while performing you own due diligence, especially since people’s experiences with companies can change over time.
We may be compensated for the following:
Referrals to consumers who use the online form or locator line that may provide expert answers to questions;
Marketing tax resolution, credit correction, student loan, consumer law services such as FDCPA and bankruptcy assistance;
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Referrals to services that help consumers with tax resolution, credit correction, student loan, consumer law services such as FDCPA and bankruptcy assistance and that may negotiate settlements on their debts.
We are not attorneys and we don’t provide legal advice. As always, we encourage you to do your homework and check out individuals and companies before you hire them. If you are already working with an attorney, we urge you to ask them your questions. After all, they will be familiar with your situation and the laws in your state.
We hope that you find solvable helpful in your efforts to get a fresh start.
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Please Note:
Certain federal and private student loans may not be eligible for consolidation/refinance.
Certain consolidation/refinance plans may result in higher monthly payments or negative consequences (i.e. prepayment penalties).
Consolidation/refinance may lead to other negative results, such as loss of grace periods.
Loans in default generally cannot be consolidated until completion of a repayment trial plan so tell your lender if you are in default and determine relevant options (be wary of those asking for upfront fees as well)
Other options or programs may fit your needs (i.e. personal loan, debt consolidation and/or debt relief). Consult your financial and/or tax advisor prior to making any decisions.
Solvable is not a creditor as it does not offer, extend or alter credit; rather it is an online market lead generator that allows consumers to shop and compare rates, terms and costs associated with financial products such as mortgages, auto loans, personal loans, student loans, etc. solvable does not originate or fund any product it markets; rather it has a network of lenders or Partners/affiliates. You may choose to speak with one or more of these lenders or Partners/affiliates to determine what your actual terms and savings may be. Only a lender can provide you with a formal application for credit, your inquiry form here is merely an expression of interest and/or intent to obtain credit or assistance. You must discuss your actual credit situation and fill out the lender’s required documents prior to obtaining an extension of credit. Network lenders may not have the best or the lowest rates so you are encouraged to continue to shop and compare additional lenders, credit unions, local financial institutions, etc. to ensure you are truly getting your best deal for your situation.
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