How to Get Credit Card Debt Assistance
Reducing Unsecured Debt Through Non-Profit Debt Counseling
Sep 4, 2009
Credit card debt assistance from a non-profit debt counseling service is the first step towards getting personal finances back on-track. It will involve a careful budgetary assessment and/or possibly a debt relief program to reduce the client's income-to-debt ratio. This process will not only achieve greater affordability, it will also help prevent further creditor contact.
Non-Profit Debt Counseling Costs
Whilst management charges are paid monthly in respect to a debt settlement program or Debt Management Plan, the actual counseling session itself is completely free. About 5.5% of monthly contributions to a debt relief program go to the counseling service to cover their business expenses. The actual amount received will vary heavily between creditors when paying-off credit card debt.
There is no need to accept what the first advisory service suggests. It is possible to receive credit card debt assistance from several counseling services because the session is free. This can prove useful when the client is not completely satisfied that a proper budgetary assessment has taken place before a debt solution is offered.
Credit Card Debt Assistance
A non-profit debt counseling session includes a careful assessment of the client's financial position. The budgetary analysis involves looking closely at income/expenditure and assets/liabilities to see if any potential savings can be realised in order to pay down debt.
The budgetary assessment alone helps approximately 40% of families restore parity to their finances. If this is the case, it won't be necessary to proceed with a debt relief program. However, clients with a high income-to-debt ratio are likely to be able to benefit from a debt settlement program or Debt Management Plan.
Debt Settlement Program
Credit card debt assistance is provided by a professional who negotiates with creditors in order to reduce unsecured debt by up to 50%. The remaining debt is paid-off over a 12 to 36 month period. The debt settlement company will receive a commission of 15% of each monthly payment.
Debt Management Plan
Once a non-profit debt counseling service has assessed what is affordable, a monthly payment will be sent to the intermediary. Paying-off credit card debt is achieved by disseminating the proceeds to creditors on a pro rata basis. Most creditors are prepared to cease further charges and freeze interest.
Credit card debt assistance from a non-profit debt counseling service can help the client to balance income and expenditure and reduce their income-to-debt ratio. If this cannot be established through optimising personal spending, a debt settlement program or Debt Management Plan could be commenced to help achieve this objective.
Disclaimer: This article in no way attempts to give legal or tax advice. One should consult a licensed attorney, tax advisor, or other qualified professional before proceeding.
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