Credit Card Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Other Unsecured Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Number of Creditors    Select One 2 3 4+ Status of Bill Payments    Select One Up to Date About to Fall Behind 1 Month Behind 2 or More Months Behind I want to    Select One Eliminate My Debt Consolidate My Debt Seek Advice Own a Home?    Yes  No

Credit Counseling and Debt Management Plans Credit counseling is ideal for the consumer unable to create a budget and stick to it. You may find that you aren't able to create a repayment plan with your creditors. Bills are piling up and you are running out of options. Credit counseling organizations can often help you solve your financial problems. The majority of credit counseling organizations are nonprofit. But this does not mean that services will be free, affordable or legitimate. Some credit counseling organizations charge rather high fees, often hidden. Others insist that their consumers make "voluntary" donations that essentially add to the consumer's debt load. Consumers can find credit counseling services through local offices, over the internet and via the telephone. In-person counseling is recommended. Many organizations - including universities, military bases, credit unions and branches of the U.S. Cooperative Extension Service - operate nonprofit credit counseling programs. Your local consumer protection agency and friends and family are good sources for referrals.

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A reputable credit counseling organization will assist you on the management of your money and debts. They will help you develop a budget. Many offer free educational materials and workshops. The counselors are trained in the areas of money and debt management, budgeting and consumer credit. They should be certified and approachable. You will need to discuss your entire financial situation with the creditor in order to develop a personalized plan for healthy financial management. The first counseling session usually takes one hour, with follow-up sessions as advised. When a consumer has a large amount of debt that contributes to his or her financial problems, the credit counseling agency may recommend the enrollment in a debt management plan. Debt management plans are not credit counseling. They should be used in conjunction with credit counseling - not on their own. These plans are not beneficial to all investors. You should spend time with a certified credit counselor reviewing your financial situation before you sign up for a debt management plan. Your counselor should provide you with several options to choose from. Even if a debt management plan best fits your financial needs, your credit counselor should provide you with a budget and aid in the learning of money management skills. Under a debt management plan, you deposit money each month to the credit counseling organization. The organization then uses your deposits to pay your unsecured debts, including credit card bills, student loans and medical bills. The payments will be made according to a payment schedule developed with your counselor and creditors. Many creditors agree to lower interest rates and waive certain fees. You should check with all of your creditors before you enroll in a plan to make sure that they offer the concessions that the credit counseling organization explains to you. For a successful debt management plan, you must make regular payments on time each month. The plan could take 48 months or longer to complete. The credit counselor should tell you up front how long it will take you to complete the plan. In most cases you will have to agree to no longer use your credit or apply for additional credit until you have completed the plan. You should avoid credit counseling organizations that charge high up-front monthly fees for enrolling in either credit counseling or in a debt management plan. The organization should not pressure you to make voluntary contributions - which are basically fees renamed. Don't respond to solicitations from credit counseling organizations that you did not contact first. A reputable credit counseling agency will not try to enroll you in a debt management plan without thoroughly reviewing your financial situation and offering options for your debt repayment. A good counselor will help you lay out a budget and offer money management education before enrolling you in a debt management plan. Never pay money into a debt management plan before your creditors accept you into the program. The creditor has the option to turn down the management plan.  If you feel pressured or uncomfortable at all, walk away. There are great credit counselors out there, you just have to shop around.