Credit Counseling Pros And Cons

Well one disadvantage of Counseling is that you'll still be receving collection calls. It doesn;t guarantee that you don't owe the debt any longer; after all you still will be having responsibility for it.

It also takes a much longer time for the loan to be paid off. In settlement you are given 1-3 years. On the other hand if you choose to go thru a DMP, you'll pay off your loan in 3-5 years.

Credit Counseling Pros and Cons:

Pros:

-one monthly payment instead of multiple monthly payments

-potential for lower interest rates which allows you to pay off the debt faster

-preserves your payment history since you remain current on your accounts

Cons:

-many of these companies are owned and funded by the credit card companies

-these programs last 5 years, if you miss a payment, you may be removed from the DMP and your interest rates will shoot right back up

-it will show on your credit report that you are in a DMP- lenders compare this to a Chapter 13 BK as the repayment structures are virtually the same

-not all credit card lenders work with credit counseling agencies

but does credit counseling stop collection or creditor calls? one such company claimed that they could, i'm wary of it thou

There isn't really a guarantee that all collection calls will stop once you're enrolled in a particular consolidation program. After all the debt collectors will inform you that you need to make your payments directly with them.

If anything, you can give the debt consolidation company Power of Attorney to speak with your collector if they still continue bugging you abt it.