Understand how credit counseling works. How credit counseling can make paying off credit card debt easy, affordable and stress free.

Who needs credit counseling? We suggest anyone with over $10,000 of credit card debt, current with their payments but struggling to pay more than the minimums is a good candidate for counseling.

The credit counseling process. A credit counselor begins the process with some simple intake questions such as marital status, number of people in household and what the client’s goals are. Next, we pull their credit report. This is a soft pull; therefore, it will not affect their credit. Now, the counselor will review liabilities. This includes any mortgages, car loans, credit cards, student loans, personal loans or any other accounts showing a balance. Next, the counselor will confirm the balances and the monthly payment amounts with the client. In some cases, we may need to obtain the interest rates on accounts from the client over the phone.

Recommendations
One of the recommendations might be enrolling into a debt management plan. On this plan, the client usually receives lower interest rates and lower payments. As a matter of fact, last year, the average client had their total payment decrease from $915 to $694 on our program. That’s a 24% decrease payment for our average customer. They also saw their average interest rate fall from 23% down below 7%.

Credit Effect
A Debt Management Plan typically has a neutral effect on your credit. You might see your score initially go down because your accounts get closed. For people that are already maxed out on their cards, they probably don’t see much change in their score at the beginning since their score is already on the lower end. But over time, as long as payments are being made on time to all accounts and new accounts are not getting opened outside the program, you should see your score gradually increase. A recent study at DebtWave showed the average client’s scores increasing about 15 points per year.
But we don’t recommend focusing so much on your credit score as a good credit score will ultimately lead you to acquiring more debt. If you have a large amount of credit card debt, focus on paying it off and nothing else. Learn to live within your means! Spend less than you make. Become Debt Free and stay that way!

Debt Management vs. Debt Settlement
A Debt Management Plan often gets confused with Debt Settlement. These plans are very different so it’s important to know how they work. A Debt Settlement Plan requires you to starve your creditors of payments for months and months and sometimes years. This of course can ruin your credit. Once the accounts are severely delinquent, the creditors will settle for about 50% of what you owe. The debt settlement company will collect monthly payment from you but won’t disburse payments until you’ve saved about 50% of one of your debts. Not only do you need to be cautious of the credit effect, but you need to understand the tax implications as well. Whatever amount of debt is forgiven will be considered taxable income. So let’s say you have $10,000 of debt and you successfully reach a settlement for only $4,500. The $5,500 debt that was forgiven becomes taxable income. Expect to pay 20-25% to Uncle Sam, so around $1,200 will be due to the IRS. And you may get sued by creditors along the way. When you fall that far delinquent, some creditors may take action to try to garnish your wages. We would avoid this debt settlement program unless you absolutely cannot afford payments on your own or the payments on a debt management program.

What to expect after enrolling?
The enrollment process consists of you paying a start-up fee which is usually around $50-$99. That amount varies depending on the state you live in. Once the fee is paid, the credit counseling agency will then contact all your creditors by sending them what are called “proposals”. Most of these proposals are sent electronically but some creditors still live in the ice age and require these to be sent by mail or fax. Although, each creditor varies, most of them reply within a week with an “Accepted” or “Declined”. DebtWave usually has an 85-90% acceptance rate with the creditors. Now, when a creditor declines the initial proposal, most times it can be fixed. Some of the more common reasons for decline include the balance was incorrect and they want a slightly higher payment, the account number was incorrect, the name on the account doesn’t match or the account is already under a hardship plan. Regardless if the proposal has been accepted by your creditors, DebtWave will debit your payment and disburse the payment to your creditors. You have the option to make ACH payments weekly, bi-weekly, semi-monthly or monthly with DebtWave.

Could you write off some debt? Go here: https://moneynerd.co.uk/write-off/
Get legal advice from a solicitor (£5): https://moneynerd.co.uk/legal-advice/

Read more here: https://moneynerd.co.uk/debt-management-plan/dmp-mortgage/

The information provided in this video is for editorial purposes only and not intended as financial advice. Free debt counselling, debt adjusting and providing of credit information services are available from MoneyHelper, an independent service set up to help people manage their money. You can find out more by contacting MoneyHelper. MoneyNerd is not associated with MoneyHelper, we just think they’re great.

MoneyNerd does not give specific debt advice and we recommend that you always discuss your personal situation with a qualified adviser that works for a company that is authorised and regulated by the Financial Conduct Authority. With your consent MoneyNerd may pass you on to a trusted debt counselling company or insolvency practitioner. MoneyNerd Limited is an Introducer Appointed Representative of Pacific Financial Solutions Ltd who is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 688034) and is classed as a debt counselling firm. Their in house IPs are Jason Bowen who is authorised to Act in the UK by the Institute of Chartered Accountants of Scotland (ICAS). Licence no. 22150 and Laura Stewart who is authorised to Act as in the UK by the Insolvency Practitioners Association (IPA). Licence no. 23590.

If you’re thinking about or actually dealing with a debt management or debt settlement company over debts you can’t afford to pay, take a moment to hear what Attorney Eric Olsen has to say. If you’re a #senior, you may not have to pay those old #debts back!

If you’re a senior in #debt, the law protects you in many ways. But you may not know it, and these debt management or debt settlement companies probably won’t inform you of the truth. Take a moment to check out Attorney Eric Olsen, Executive Director of the HELPS Non-profit Law Firm, explaining why seniors may not have to pay back old debts.

Jeff Hoyt is SeniorLiving.org’s Editor-in-Chief.

For why seniors don’t have to worry about old debts, watch https://youtu.be/FDlyud-vG90

To learn how seniors can avoid paying taxes legally, watch https://www.youtube.com/watch?v=xv7Om8SAIAM

To watch Attorney Eric Olsen explain why seniors don’t have to worry about student loans, check out https://www.youtube.com/watch?v=PE4a7oaxc1E

To learn when seniors should consider Bankruptcy, watch https://www.youtube.com/watch?v=Iu0fy8JujGo

Subscribe to SeniorLiving.org on YouTube:
https://www.youtube.com/channel/UCIYQwu7wEpLyijISnF5Z6eA?sub_confirmation=1

For more tips for seniors: https://www.seniorliving.org/

If you’re interested in joining the hundreds of thousands of families who’ve found senior living communities on SeniorLiving.org, read the reviews on our website: https://www.seniorliving.org/housing/

To contact the HELPS Nonprofit Law Firm, call 1-855-435-7787 or visit helpsishere.org.

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Like to save money? Please watch: “The Best Senior Citizen Discounts”
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?See if you qualify to use our free debt relief tools: https://link.upsolve.org/ReliefFromDebt ?

???? Upsolve is the internet’s leading nonprofit source of financial literacy education. Nearly 3 million Americans visit Upsolve.org each year. Our services are 100% free. Here’s how we do it: https://bit.ly/howitsfree

Debt Management Plan = All eligible debts pulled into a 3-5 year repayment plan. Plan is overseen by a credit counselor.

DMP can hurt your credit score in the short term, especially if you have a strong score when you start the DMP.

Debt management programs might sound unrealistic but our trained Credit Counselors have your best interest in mind!

Veteran Benefits at Risk Debt Management 101 for US Veterans

Struggling to keep up with monthly payments? You’re not alone.

Watch the full video to learn how a debt management plan could be your structured path forward ????

Financial coach Rob Wilson TV breaks it all down in 5 debt relief options that actually work (Which one is right for you?):

? FREE financial counseling session first
? Counselor reviews your budget & debts
? Creates a structured 3–5 year repayment plan
? You make ONE monthly payment to the counselor
? They distribute payments to your creditors

Perfect if you’re:
• Only making minimum payments
• Juggling multiple cards
• Starting to fall behind & feeling stressed

It’s not a quick fix, but it’s STRUCTURED debt relief without needing a loan ????

Want to explore ALL your debt relief options and see if a debt management plan is right for you? This video covers real examples and compares which debt relief options may work best for your situation.

Plus, learn how Freedom Debt Relief supports people just like you—offering proven paths to financial freedom. Whether you’re behind on payments or just need a plan, Freedom Debt Relief can help you take that next step.

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Are you considering consumer credit counseling or debt management program in the new year to help manage your debt?

Here are some pros and cons for you to consider. Be especially cautious if you are planning on buying a home in 2024!

Apply anytime for a home loan at www.LetsTalkMortgage.Pro

Erika Slayton
NMLS 76823
Erika@LetsTalkMortgage.pro
Cell 210-219-7608

Are you overwhelmed by credit card debt, medical bills, or personal loans and wondering if a debt management plan is the right solution for you? In this video, we explain what a debt management plan is and how it works step by step, using clear examples and simple language for beginners. You will learn how a debt management plan can help lower your interest rates, consolidate your payments, stop collection calls, and get you back on track financially without filing for bankruptcy.

We cover why people choose debt management plans, what it takes to qualify, and what types of debt these plans actually work for. You’ll discover how much a debt management plan costs, how long it usually takes to complete, and what effect it can have on your credit score over time. We also explain the common myths about debt management plans, what to watch out for before enrolling, and who might not benefit from this option.

Throughout the video, we share real-life examples of people who used debt management plans to pay off debt faster and reduce financial stress. You’ll also find out how to start if you think this option is right for you and what to do if your income changes during the process.

This beginner-friendly guide answers all your questions about debt management plans and helps you make an informed decision. Whether you’re just starting your financial journey or looking for a way to regain control of your money, this video gives you the knowledge you need to decide if a debt management plan is the best choice for your situation. Watch now to learn everything you need to know about managing debt responsibly and effectively.

#DebtManagementPlan #PayOffDebt #FinancialFreedom #CreditCounseling #PersonalFinanceTips