One of the more popular forms of debt relief is credit counseling. However there is one disturbing fact about these debt relief programs. Which is the fact that the vast majority of debtors enrolled into credit counseling programs fail to ever graduate. There are a few reasons why this occurs which I will go over throughout the rest of this article.
For starters most credit counseling companies are actually owned and operated by the credit card companies themselves. So in reality the credit counseling agency is not working for the client but for the card companies. The card companies dictate to the credit counseling programs what the minimum payment requirement will be and what the interest rate will be, there is no negotiation on this at all.
Most debtors will realize that the payments that are going to be required for a credit counseling program are usually very close to what the debtor was putting out for minimum payments on their own. So for those that found it a real struggle to maintain their minimums may find credit counseling just as hard.
The kicker that makes most people fail off these programs is that one missed payment can lead to the debtor getting kicked off the program. It is not the credit counseling program that will give the debtor the boot, but instead the credit card companies themselves.
So for those who are in somewhat of a tough financial bind in the first place, credit counseling may not really work out. You must feel secure in that your income level will not go down, or there will be no unforseen financial emergencies that might pop up. And the reality is most people lives are not this stable. Especially over the course of 4-6 years, which is the time it will take to complete most credit counseling programs.
Steve Martin is a debt analyst for the US Consumer Advocate, which specializes in credit card debt settlement