Debt Management a.k.a. Consumer Credit Counseling

Often confused with debt consolidation, debt management is an option that is offered through Consumer Credit Counselors (CCC). CCC will help to lower the interest rates on most of their client’s accounts. A lower interest rate can reduce the amount of time it takes to get out of debt. With debt management programs, clients do not pay their creditors directly each month, but rather make payments to the CCC’s who then disperse money directly to creditors on their client’s behalf. With debt management plans, you only make one payment a month to your CCC, which is why this choice is often confused with a form of debt consolidation.

Debt management is an excellent alternative to debt settlement in New York. While also referred to as Consumer Credit Counseling, Credit and Debt Counseling is very often confused with Debt Consolidation, but both are in fact different choices offered by our debt lawyers and affiliates. The reason for the confusion between the two different debt relief options is that they both provide the result of one monthly payment and lower interest rates than the rates currently being paid by a person struggling in debt.

Debt Consolidation is a loan that is taken out to pay off one or more other debts and therefore there would be a new company that is owed money. Debt management plans differ in that there is no loan but rather a negotiation to lower the interest rates that you are currently paying.

Debt management may also be confused for Debt Settlement, which is a debt relief option that also offers one monthly payment. The main difference among others between debt settlement and debt management is that Debt Settlement lowers the principal balance to be paid back by the client and debt management there is no reduction of the principal balance. In other words with credit and debt counseling, you will pay back the full amount owed and will continue to pay interest on top of the principal balance.

The main benefit of credit and debt counseling plans is the interest rates charged are lower, and therefore someone in debt would pay back less overall by the time the balance is eventually paid off, as opposed to paying the cards off at the higher interest rates.

To enroll in a debt management plan you need to show that you are undergoing a significant hardship that is causing your current credit card payments to cause financial hardship. Your acceptance into the program is based on your hardship, monthly budget, and creditor accounts. If accepted you would have the convenience to begin making one monthly payment to our credit counselors instead of monthly payments to each of your creditors for each account you may have. Our counselors would, in turn, would pay each of your creditors an amount each month in a specified order. Being that you would have qualified and enrolled, the interest rates paid would be lowered. Each creditor has different rates through this type of program so it is virtually impossible to tell what your new rates and payments would be through Credit and Debt Counseling without undergoing an evaluation.