Posted on July 13, 2009 at 8:40 pm hello everyone i am new on these forums. i live in DE and i have $19 thousand in unsecured debt. i have fallen behind on my bills because i was tempoarrily disabled. i am working again and i have been left with a huge bill on my credit cards. i am not very well versed with debt consolidation options until a close friend told me abt credit counseling. i am quite unsure abt this matter and decided to ask some advice on this with you guys. i want to know what you think abut this. so my question is, should i use a credit counseling service? is it a wise way to go abt dealing with my debt? or are there alternatives in getting rid of my bills?thank you

Posted on July 14, 2009 at 1:32 am Here are some questions that you can ask yourself regarding your current financial situation:1. Are you barely able to make the minimum payments on your credit cards?2. Are you consistently late in making bill payments?3. Have you been receiving calls from your creditors and collection agencies on a regular basis?4. Did your attempts at making reasonable payment plans with your creditors turn out unsuccessful?

Posted on July 14, 2009 at 2:20 am well my income is slowly going back to normal so i think i can be able to make the minimum payments again. ive been behind for just three months and i was not able to communicate with my creditors and collectors because i have privacy id, i never let them thru. dont get me wrong i want to pay my bills but i don't want to go thru their terms, the interest they charge is crazy and i am getting all these fees for being late.i did a little research too, can u tell me abt a debt management plan?

Posted on July 14, 2009 at 3:34 am Debt management plans last for as long as five years and have the potential to lower your current interest rate on all your credit cards to 15%. When you're under a DMP, you'll be making one payment to your credit counseling firm, who in turn will distribute the payments equally to all your creditors.

Posted on July 14, 2009 at 3:52 am oh great i can certainly use that. how are the fees for credit counseling services? and how much are my monthly payments going to be?

Posted on July 14, 2009 at 8:40 am Typically, credit counseling agencies will charge a small set-up fee and then a monthly maintenence fee as well. These monthly fees on average are between $25-30 dollars. Your monthly payments may be comparable to what you are paying now on minimum payments. The reason is simple- in a DMP, you must remain current with your creditors so getting a lower monthly payment may not be an option. Or, at the very least, it may take some time to see any relief at all since the credit counseling agency has to negotiate lower interest rates. The problem is, not all creditors will agree to do so, and in the end your payments could be just as high as they are now. To address the original question- should I use a credit counseling service?- again, that depends on your situation. Typically a good fit for credit counseling is someone who does not owe too much (under $10 K), has no problem making their monthly payments but is frustrated with their interest rates which are preventing them from paying off the principle amount of debt faster. That being said, the above does not mean that if you are facing different circumstances credit counseling won't work at all. Just be sure to do your homework.

Posted on July 15, 2009 at 2:09 am hi Steven, thank you for your reply....  that means i am not really a good fit since you said that the debt amount should be $10k at least.  oh well.....can you or the others suggest ways on taking care of my debt?

Posted on July 15, 2009 at 4:43 am Bankruptcy can do the trick. You'll be debtless in no time! And you'll start on a clean slate.

Posted on July 15, 2009 at 5:58 am Well bankruptcy CAN do that but I'd strongly suggest that you use other means first before considering it as an option. It's true that bankruptcy will give you a clean slate and whatnot but the effects it leaves on your credit report are quite weighty. You'll be left with a ten-year notation on your file for a Chapter 7, and a seven-year notation on a Chapter 13. Public records also reflect the bankruptcy filing for 20 yrs.

Posted on July 15, 2009 at 7:26 am pink panther- I actually meant that credit counseling usually works best (usually) for people who owe under $10 K and it sounds like that is your situation? It is debt settlement companies who usually require at least $10 K to work with you. That is very important for anyone who is wondering- should I use a credit counseling agency?