How Debt Consolidation Through A Credit Counseling Agency Works?
Most creditors offer special repayment plans to their customers who undergo financial hardship and enroll in a nonprofit consumer credit counseling agency’s debt management program. Upon enrollment, creditors are then informed that their customer has entered a debt management program and are asked that they reduce the client’s monthly payment, reduce or stop interest, stop late fees and over limit charges, and to re-age past due accounts to bring them current. Because most creditors support the agency, these special repayment plans are usually accepted. In the typical scenario, enrollment in the program will reduce the consumer’s overall monthly debt service 10% to 30% and reduce the average interest rate significantly. In addition, once enrolled, correspondence from creditors regarding past due accounts are directed to the agency. In other words, in addition to the above benefits, the program puts an end to upsetting collection calls and, financially speaking, offers the consumer a ne
