Credit counseling is the process by which a qualified professional assists a consumer in development of a plan that focuses on resolving financial issues in a manner that is best suited for their financial goals.

Debt Management is one such solution to resolving financial issues. The process begins with a certified credit counselor reviewing your situation and helping you determine your short and long-term goals. After the development of a working budget for handling your monthly expenses each of your credit accounts is examined in detail. Then, a repayment plan is developed to fit your needs and meet your creditor’s requirements. During a Debt Management Program you make monthly payments to Credit Advisors. These payments are then forwarded to your creditors in accordance with your plan to become debt free. Many creditors recognize a consumer’s efforts to repay debts through a Debt Management Program by making concessions, such as adjusting your interest rate and lowering required payments to assist your program progress. Credit Advisors works with over 50,000 creditors nationwide.

1. Lower Payments. Debt Management plans can lower your monthly payments to your creditors by up to 50%.   We work WITH your creditors.   When you join a debt management plan, your creditor is on board with us.   They are willing to lower the payment in some cases to give you the breathing room you need when you are working with approved credit counseling agencies.   By working with a counseling agency, you are proving that you want to repay your debts, not just settle them or file bankruptcy.
2. Lower Interest and Fees. Creditors often will lower the interest and eliminate late and over-limit fees you are paying so more of your money is going to pay down the principle once you are on an approved plan.  Creditors can be your best partner on the road to debt free living.
3. No more creditor calls – On a debt management plan, the Creditor is your partner!  Unlike debt settlement, the creditors have approved of this plan up-front.  They will stop calling and nagging you.
4. SAVINGS – The beauty of interest reduction is that instead of simply paying the interest and barely scratching the surface of your debt, you can start paying down the principal immediately. In the same way that debt seems to snowball out of control, a successful DMP can yield surprisingly quick results. Below is an example of what you might save in interest charges if you participated in a DMP and owed a credit card company $3,500:

Total Payment Not Using Service–$7,069.98

Total Payment Using Service–$3,184.98

Amount Saved–$3,885.00

*While results vary depending on your debt, in most cases savings are significant

1. One Place to Pay – You can now sit back and let Credit Advisors handle your money and payments. No more juggling, worrying who to pay first, or going to the post office.  We take care of all those decisions and payments.
2. Out of debt quicker – Because you are paying less in interest, you get out of debt much quicker on a debt management plan than if you go it alone.

Watch out for companies that want to cherry pick your debts by only handling credit cards. They are not working for your benefit. At Credit Advisors we recognize that there are other types of debt that can create problems for consumers. Due to this, CA will also include in your program medical bills, personal unsecured loans, post repossession balances, old utility bills, student loans, state or federal income taxes, personal/family debts, certain payday loans and other unsecured debt.

A good credit counseling service will treat you with respect, have certified credit counselors to assist you in developing an action plan around your needs, be accredited through BVQI or other certifying company, have a good record with the Better Business Bureau, offer financial education, and have depth of experience. Credit Advisors has been in business for over 60 years!

 We also recommend you do your own independent research but be wary of new, fly-by-night debt management and debt settlement companies. Remember that if something seems too good to be true, it probably is.

Credit Advisors provides many advantages over other counseling agencies. Here a just a few:

• Many counseling agencies rely primarily on creditors to fund their service and as such there appears to be a conflict of interest. This encourages them to favor creditors that are in their best interest not yours. So, are they really representing you or the creditors?
• Some agencies charge a flat fee regardless of what you can really afford. We believe you should only have to pay what you can truly afford.
• Credit Advisors will allow you to divide your monthly payment between pay periods. We don’t require one large payment a month.
• CA has a much lower counselor to client ratio than most other agencies.
• Many agencies will only handle debts that are easy to negotiate or debts to those creditors that contribute a percentage of funds back to them. Credit Advisors handles ALL types of debts regardless of the difficulty or creditor financial support.
• CA offers online access so you can view your account, update personal and creditor information, and stay informed on the progress of your program at your convenience 24 hours a day, seven days a week.
• At Credit Advisors, we offer multiple payment options to our clients to make becoming debt free as easy as possible, from payroll deductions to electronic funds transfers.
• Credit Advisors monitors your credit record to ensure your timely, consistent payments are being recorded by your creditors (where allowed); this also provides you an opportunity to address all debts. Most of our competitors do not take this hands on approach to handling your debts because this approach is time consuming and expensive. We believe you deserve nothing less!

There are some things you should consider regarding debt settlement.

Settlements in your favor can generate a tax liability as the creditor is required to report all amounts forgiven (over $600) to the IRS as income. So if you had a debt of $10,000 with a credit card and settled the debt for $6,000 the credit card company would send in a form 1099 to the IRS showing the $4,000 that was forgiven as income for you.

Some creditors will not even discuss settlement arrangements on any account that has not yet reached a charge-off status (I9, R9 or O9). You have to have your credit trashed to even begin negotiations for settlement. These ratings can remain a part of your credit file for up to 7 years from the date of last activity.

Because you are not working WITH your creditors, they will not halt collection activities.  In fact the calls and letters are bound to increase to very stressful levels while you are on a debt settlement plan.  Many people are sued while waiting for a settlement.

You should consider whether you will want to purchase a home in the near future. Some (not all) mortgage underwriters will require you to go back and pay any amounts settled before they will approve an application for a mortgage. At the very least, they will want documentation of the arrangements and proof the terms were kept.

You should consider your employment plans in the near future. If you are employed in a field that requires bonding, licensure, or security clearances, settlements can be a potential problem.

Settling the accounts now will still require you to monitor these accounts in the future. You will have to ensure that they are correctly reported to the credit bureaus according to the terms negotiated. You may be required to send documentation to the credit bureaus to update the information on the settled accounts several times during the life of those accounts on your credit file.