How is debt settlement different from consumer credit counseling?
A Debt Settlement Consultant is trained to settle the overall amount of your debt by negotiating payments with creditors for less than the amount you owe (which is considered as full satisfaction of your debt). On the other hand, a Credit Counselor is trained to design a repayment plan to assist you in repaying, in full, the money you owe. The way Credit Counseling generally works is: • ·The Credit Counselor takes a look at your finances (income, bills, etc.), and prepares a repayment plan that suits your budget. • • ·Then the Counselor sends the repayment plan to your creditors for approval. • • ·If your creditors agree to the repayment plan, you begin making payments to the Credit Counseling Company. Your Counselor will distribute payments to your creditors according to the guidelines established by your repayment plan.
