Free Debt Counseling ? Bank article and Finance article

Everybody has had to use a credit card for something in their lives. Some individuals use their credit cards for emergencies only; others use their credit cards more freely. There is over $2.41 trillion in consumer debt in America and most of that debt is from credit cards. The average American household has over $15k in credit card debt, and there is a whole group of consumers that are way over their heads in credit card debt. Countless American consumers are dealing with unmanageable credit card debt and may feel like they have nowhere to turn.

Fortunately for these Americans there are many non-profit organizations that offer free tools, resources and advice to any consumer that are in trouble with their debts. These non-profit agencies that offer free debt counseling have been around since the 1950s and have saved numerous households from bankruptcy and from the grip of credit card debt.

What is Debt Counseling?

Debt counseling at its core is simply financial education. The original goal of the NFCC (National Foundation for Credit Counseling) was to spread financial literacy throughout the US in order to help consumers stay out of debt and bankruptcy. Now a day's credit counseling can go beyond educating consumers; now counselors are involved in analyzing a consumer's debt, setting up a sensible budget, and negotiating lower interest rates and fee waivers with creditors

What You Can Expect from Debt Counseling?

Always conduct your due diligence and make sure that you have found a credit counselor that has an excellent BBB (Better Business Bureau), outstanding customer reviews or testimonials and is an organization that you feel comfortable with. Once you have found a credit counselor that you like, you can expect a debt counselor to ask you a lot of questions in regards to your income, expenses and credit card debt. You are going to receive a great deal of information, resources, education and tools to help you find out how you got into debt, how to get out of debt and how to successfully set up a budget.

Your first session is also going to involve your counselor analyzing your financial situation. You should gather up three months worth of credit card bills, banking statements and reoccurring monthly bills. Be prepared to give your credit counselor all your information so they can properly assess your financial situation.

After your first counseling session, your counselor should be able to ascertain whether a counselor can help you or not. If the counselor feels that he or she can help your situation he is going to suggest that you enroll in their DMP (debt management plan).

The DMP

The debt management plan is used by credit counselors to assist in the reduction of debt for a consumer; it is utilized as a tool to help the counselor and consumer negotiate debt with a creditor. Once a consumer is enrolled in a debt management plan creditors will be contacted by the counselor to declare that they are enrolled in a DMP and the negotiation for lower interest rates, fee waivers and overall debt reduction can take place. A good credit counselor can lower an individual's debt load anywhere between 20%-to-50% and depending on the size of the debt can have the entire debt paid off in two to three years.

Even though the debt counseling is free, there is a suggested donation every month while enrolled in the debt management plan. It shouldn't be more than $75 a month but is well worth the investment, and on average the debt management fee is normally around $50.

Financial Independence

The goal of credit counseling is to educate the American consumer on personal finance and how to rid themselves of debt and give them the tools and resources to help them avoid ever getting in debt again. The road to financial independence is not going to be easy, you are going to need discipline, commitment and determination in order to succeed but that is a small sacrifice you're going to have to make to become financially independent.

Ben Joven is a media consultant for a top free debt counseling organization, whose credit counselors have been assisting consumers become debt free for over 20 years.

By Ben Joven
Article Source: http://EzineArticles.com/?expert=Ben_Joven

Source: http://www.bankingsite.info/credit/129-free-debt-counseling.html

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