As part of this program, a Credit Counsellor works with you to help you establish a realistic budget.
Based on your budget they are able to help you determine a realistic monthly payment that you can afford to pay on your debts.
Depending on your situation, you may be able to negotiate a better interest rate for yourself, but you may also need someone to negotiate relief from credit card debt for you. Negotiating credit card debt relief means asking your credit card companies to lower the interest rates they are charging you.
With a lower interest rate, if you are carrying a balance, you end up paying less interest.
Here’s an overview of the types of debt help you can get from different agencies.
A Debt Management Program (DMP) is when you get help from a credit counselling organization to consolidate your unsecured debts into one manageable payment. This type of consolidation works with your budget so that you don’t have to borrow more money to try to get yourself out of debt.
With your permission, the credit counselling agency then approaches all your creditors and negotiates for all your debts to be included on the Debt Management Program at a payment you can afford and with all the interest rates either eliminated or substantially reduced.