Credit Counseling: Getting Out of the Debt Merry-Go-Round

It was under unique circumstances that I found myself in a place where I needed credit counseling. I had been in the hospital and no one was able to help me with paying my bills. The credit cards became enormous and I didn't know what to do. I wanted to pay my bills, but on a disabled income there was no way that I could pay the high premiums that the credit card companies ere insisting on. I called them left them messages and got threatening and angry calls from creditors demanding the balance all up front. Until, I finally got through to the credit company and they gave me the option of credit counseling.

I didn't need debt settlement. It wasn't that bad yet. However, I needed to do something if I was ever going to get off of the merry-go-round that was making my bills impossible to pay. Fortunately, I got a hold of customer service representative that helped me to understand the benefits and consequences of debt management. She put me through to a company call MMI, Money Management Incorporated. They put me on a plan that lowered the payments and interest to the point where I actually had a hope of getting out of debt. Credit counseling is not a walk in the park there are consequences. However, with out it I would be no where near getting out of debt.

Credit counseling is counselors that have preexisting connections with the credit card company to help you to manage yourself out of debt.  In my case they were able to take a 20% interest rate and reduce it to 9%.  MMI is a nonprofit organization and the counselors were able to help me to reach my credit goals.

There were a few drawbacks to initiating credit counseling on my two credit cards.  One is that it will effect your credit score for as long as you use it.  I will be on it for about 3 years and during that time my credit score will be very low.  This is because it shows on your credit report that turned to credit counseling to settle rather than making the normal absorbent payments.

Also, MMI, takes the money directly as a debit out of your checking account.  You don't need to send checks, but it takes a lot of doing to not have the debit come directly out of your account.  You have to make sure that the money is in there.

Credit counseling can lower your interest rate so that the majority of the payment is applied to the balance of the debt, not just the interest.  As I stated previously, I was able to have a reduction in my interest by about 10%.  This made the payment apply to more than the interest and I should be out of debt with in 3 years.  One of my credit cards is nearly now payed off.

They make an effort to make the payments possible to handle.  I am making a payment of $137 each month given that I am low income this is a tremendous help over the $400 that the card was asking to get paid.  This is a rainbow at the end of a tunnel that makes it possible for me to move forward.

In conclusion, it would like you weigh the benefits and drawbacks to credit counseling, to see if it is worth getting assistance with your debt.   Times are hard and life is uncertain.  A little extra help is sometimes worth it.