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What to Expect From Debt Consolidation Counseling

Are you having difficulty paying your bills on time? Are you constantly being harassed by debt collectors? Are you worried about losing your home or automobile? You are not alone. Many Americans face tough financial situations at some point in their lives. Although debt can seem unmanageable at times, debt consolidation counseling can help. Whether it was caused by personal or family illness, overspending, or unexpected emergency expenses, your debt can be overcome.

CareOne’s debt consolidation counseling program works with you to evaluate a series of debt management options. From debt management plans to settlements with creditors, CareOne providers have the knowledge and industry experience to help you resolve your debt problems.

Keep reading to learn about all the potential debt repayment options that our consolidation counseling has to offer for you.

What Are My Options for Debt Relief Services?

Debt settlement plans and debt management plans are two options that can help you become debt-free if managing debt on your own hasn’t helped. Both of these plans have pros and cons that need to be evaluated by you and a credit counselor before you start making payments toward your debt. If you have tried everything and still are unable to manage your debt, these options might work for you.

The top priority of CareOne providers is teaching those who are in debt best practices for a financially secure future. Credit counselors will advise you on managing money and debts, will help you develop a budget, and will teach you the fundamentals of financial success.

How to Consolidate Debt with a Debt Management Plan

A debt management plan works by compiling all of your unsecured debts (like credit card debts) into a manageable, single monthly payment. A credit counselor will negotiate with creditors to get a lower interest rate and lower monthly credit card payment. Most creditors will also waive over-the-limit fees and reduce interest charges when efforts towards repayment are shown.

Advantages of a debt management plan include:

  • Creditors may reduce interest rates and waive late fees
  • Debt is repaid in full
  • One consolidated payment for a variety of debts

Disadvantages of a debt management plan include:

  • Some creditors may not cooperate
  • You must make a commitment not to accrue any more debt

Aside from these factors, Debt Management Plans are a solid choice to repay owed debt. In as little as 3 years of consecutive payments, most creditors will offer more significant reductions in owed interest and credit fees.

If this option does not sound like a right fit for you, keep reading to learn about other debt repayment options that might work in your favor.

How to Eliminate Debt with a Debt Settlement Plan

An alternative to a debt management plan is a debt settlement plan. Debt settlement plans may give you the benefits of a debt management plan but work in different ways to solve debt issues.

Debt settlement plans may be a less drastic alternative to bankruptcy for those who want to pay back a portion of their debt but cannot afford the payments of a debt management plan.

Debt settlements work differently than a debt management plan. Payments are made into a settlement deposit account in an amount that you can afford. In the meantime, your credit counselor works with your creditors to reach a settlement for less-than-full repayment.

Once a settlement is agreed to, debts are repaid from the settlement deposit account to the creditor. Take a look at the different advantages of a debt settlement plan before deciding on which option works best for you:

Advantages of a debt settlement plan include:

  • Alternative to bankruptcy
  • Settlements are usually completed in 3 to 5 years
  • Monthly payment is an amount that is manageable

Disadvantages of debt settlement plans may be:

  • Credit profile will be negatively impacted
  • Potential to be taxed on unpaid debt
  • Creditors may not cooperate

If debt consolidation counseling sounds like it may be a good fit for you, look at our tips on how to choose a debt consolidation company.

To get in touch with a fully accredited Debt Consolidation Agency to help you consolidate your credit cards, call CareOne today at 1-888-888-CARE, or contact us online. You can get a free, no-obligation consultation with a specialist to see what options make the most sense for your individual situation. 

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