What Is Debt Counseling?

When you’re struggling to keep up with all your bills, Debt Counselors advise you on your debts, maintaining a budget with your current income, and provide money management seminars and education.
Debt Counseling or Credit Counseling is when you work with an advisor for guidance on how to set budgets, manage personal finances, repay debts, and repair credit.
Often this takes place via one-on-one sessions that are customized to your situation. Counselors will review all the financial information you provide, help set a budget that considers your income and expenses, and set up payment plans for each of your debts owed.
Additionally, Counselors sometimes have pre-negotiated interest rates with various creditors that their clients can benefit from. However, despite lower interest rates, Counseling does not reduce the total amount of debt you must pay back. They provide tools that can make paying back your debts more manageable.
It’s important to note that when you work with a Counselor, your current credit card accounts will likely be closed to new charges, and you will be expected to avoid opening new credit cards or taking on additional debt while in the program.
If you’re struggling to make minimum payments or rely heavily on using credit cards to get by each month, Debt Counseling might not be your best choice.