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Crushing Debt Alone

Credit counseling may not be the best solution for debt relief

Residents of Florida struggling to make ends meet may not be able to get out of debt using credit counseling services. Credit counseling services work with people who are struggling with debt and create a debt management plan. The counseling service will then work with creditors to attempt to lower monthly payments and reduce fees and interest rates. However, according to National Debt Relief, the completion rate for this type of debt relief is only 26 percent.

In theory, the premise behind credit counseling services is solid, and this is why people are able to get out of debt using them. Still, only one out five people complete their debt management plan. The majority of people who looked into these services ended up choosing other solutions for getting out of debt. This may be due to people becoming discouraged because of lack of concessions from creditors.

While credit counseling can help people get out of debt, both bankruptcy and debt consolidation have higher rates of completion. People who are deeply in debt also have the option of debt settlement.

Credit counseling and negotiating with creditors may be able to help someone reduce their monthly credit card payments, but if someone is not making enough money to meet these payments comfortably, it may not do them much good. This is why speaking with a bankruptcy attorney may be helpful for individuals who are struggling financially. An attorney could help someone understand what is involved in filing for bankruptcy and what options they have for getting out of debt.

Source: Times Union, “National Debt Relief Sheds Light To The Ugly Truth About Credit Counseling,” April 11, 2013

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