Debt Consolidation

Debt consolidation, also known as Consumer Credit Counseling, is a type of debt reduction program that allows debtors to pay off their unsecured debts in a much shorter period of time – usually five to seven years.  And, for those debtors who are already behind on their payments, and receiving phone calls and letters from their creditors, joining a Consumer Credit Counseling program will stop all of the harassing calls and letters for any account placed on the program.

A debt consolidation program is usually facilitated by a CCC – a non-profit Consumer Credit Counseling corporation. The CCC has structured relationships with most creditors that enable their clients to pay off their debts at a much lower interest rate, often about 50% of what the debtor is currently paying. Since a monthly minimum payment to a credit card company is almost all interest, lowering the interest rate by 50% cuts the monthly payment almost in half. And, a greater percentage of what is paid goes to reducing the amount owed, rather than to servicing the debt.

During the telephone consultation, a Credit Counselor will explain what the new interest rate will be for each account placed on the program, what the total monthly amount will be, and how many months the program will last.  The credit card companies work with the CCC’s to allow people pay off their debts in a reasonable amount of time and at a reasonable interest rate.

Is Consumer Credit Counseling right for you?

If your total unsecured debt is less than $15,000 and you are having trouble making your monthly payments, or if you have been making them every month but cannot pay enough to reduce the total amount you owe, Consumer Credit Counseling may be right for you.