Our credit counselors are here to help you with debt management.

How ACCC’s Personal Debt Consolidation Program Work

How does debt consolidation work with ACCC? First, a certified counselor from ACCC will assess your current debts and bills. This helps create a manageable budget for you. Once you establish a budget, and if you are a viable candidate, your counselor will provide you with debt consolidation information. If you do go ahead with the personal debt consolidation program, also known as a debt management program, ACCC will work out a plan with your creditors. In the program, you will make one monthly payment to ACCC and we pay each of your creditors on your behalf.

Benefits of a Personal Debt Consolidation Program

• Under the personal debt consolidation plan, your monthly financial obligations will be greatly simplified. This will make it easier for you to budget and stay on top of your payments.
• In many cases, creditors participating in the ACCC debt consolidation program will agree to lower interest rates and to waive existing late fees and over-limit fees. This can have the effect of lowering your monthly payments and reducing the time it takes you to become debt-free.
• In combination with the debt consolidation program, we offer expert debt advice and educational resources.  This will help you stay on the path to a debt-free future.
• Compared to most debt relief companies, ACCC has very low fees.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

The benefits of credit counseling can help you become debt-free.

Three Benefits of Consumer Credit Counseling

What is Credit Counseling?

Credit counseling is a financial service designed to educate consumers about how to pay off their debts and how to avoid debt in the future. A counseling session involves an analysis of a consumer’s financial situation, evaluation of debt reduction strategies for paying off or managing debt, and education about money management. Credit counseling is designed to help consumers who are struggling with debt to better control their financial lives.

Here are 3 benefits of credit counseling:

1. Working with Certified Credit Counselors

One benefit to credit counseling is that you will no longer be alone with your finances. When you seek credit counseling from a non-profit credit counseling agency, you will speak with a certified credit counselor for a full evaluation of your current financial situation. This analysis includes a detailed review of your assets, debts, and expenses. As everyone’s financial situation is unique, your counselor will help you come up with a personalized plan that works for you. Together, you’ll establish a reasonable budget while still being able to pay off your debts at the same time. In most cases, consumers are able to pay off their debts in 5 years or less.

2. You’ll Make A “Get Out of Debt” Plan

A major part of credit counseling is helping consumers come up with an actionable plan to get out of debt. Your counselor will help you look at the pros and cons of different debt relief strategies including credit card forgiveness, debt management, and more. Keep in mind that there is no “one size fits all” debt solution. These discussions will help your counselor to create a comprehensive picture of your situation, from which your counselor will make a recommendation.

For example, if you pursue credit counseling with an agency like American Consumer Credit Counseling, your counselor will evaluate whether you qualify for a debt management program, or DMP. A DMP is just one approach to debt relief that helps clients ultimately get out of debt faster. If you qualify for the program, advisors will work with creditors for possible reductions in finance charges, late or over-limit charges, monthly payments, and overall debt payoff time.

3. Gaining Financial Education

In addition to creating a plan, credit counseling sessions are also designed to educate consumers. Even if you decide not to pursue a course towards debt relief, one of the benefits of credit counseling is having access to a number of financial resources. Credit counseling sessions themselves are designed to help consumers see how they’re doing financially and how they can improve. For example, you and your counselor will discuss topics like budgeting, cash flow, income, and more. Plus, ACCC provides newsletters, articles, and a website full of tools as additional resources. If there’s ever a time to gain clarification on any questions you may have, take advantage during a session. In a larger sense, financial education can help you better manage money and stay out of debt in the future.

There are many benefits of credit counseling. Whether you’re seeking help to create a budget, or if you want to eliminate debt, credit counseling may be the best next step. By simply researching your options, it’s a good sign that you are already on the right path.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

Consolidating debt with bad credit isn’t your only option.

Should you consider consolidating debt with bad credit?

Debt consolidation involves taking out one loan to pay off multiple unsecured debts. This loan usually has a better interest rate than your credit cards, so it saves you some money. As with any other loan, you get a better interest rate on the loan if you have good credit score. If your credit is below 700, you may not get the best interest rate. You may not even get approved at all. Because of this, you should probably look into other options besides consolidating debt with bad credit.

Debt Management Plan 

There are alternative options for those who have bad credit. Technically, consolidating your debt with bad credit isn’t impossible. One of the best options that doesn’t require a good credit score is a debt management plan. A debt management plan works like debt consolidation in that it combines all of your unsecured debt into one monthly payment. However, it is not a loan. There are also no minimum credit requirements. A debt management plan is administered by a nonprofit credit counseling agency, and they negotiate with creditors to get you lower interest rates and waived fees. Clients in a debt management plan with ACCC can get out of debt in five years or less. 

Debt Payoff Options to Avoid

Some options for paying off debt do more harm than good. Debt settlement is one such option. When you settle your debt through a debt settlement agency, you don’t pay off the principal amount. For example, if you owe $10,000 in credit card debt, a debt settlement agency can negotiate with the creditors so you only have to pay $7,000. This can seriously damage your credit score. If your credit wasn’t good to begin with, you could have a very hard time building it back up again after debt settlement.

Additionally, the $3,000 that you supposedly saved by settling can be counted as income by the IRS and can increase your taxable income for the year. Debt settlement agencies also charge high fees, so in the end, you probably aren’t saving any significant amount of money.

Final Thoughts on Consolidating Debt with Bad Credit

Consolidating debt with bad credit may not be possible through a traditional debt consolidation loan, but instead through a debt management plan. A debt management plan can help you improve your credit score as you pay off your debt. When you finish the debt management plan and have a better credit score, you can rest assured that you will get good interest rates on any future loans and lines of credit. Just be sure to use credit responsibly!

If you struggle to pay off debt, ACCC can help. Schedule a free credit counseling session today.