Americans Are In More Debt Than Ever Before | How Credit Counselling Can Help

How to get out of debt fast with credit counseling

The latest data from the Federal Reserve Bank of New York revealed a greater increase in household debts than ever before, topping off the highest peak observed since 2008. The first three months of 2017 displayed a $149 billion increase in total household debt compared to total debt recorded at the end of 2016. It was a shocking discovery to find headlines announcing a $1.3 trillion student loan debt in the United States.

During the month of September, 2017, the latest statistics indicate an extensive growth in American debt with a total outstanding U.S. consumer debt of $3.9 trillion. For most Americans who are sinking in such great proportions of debt or are approaching the dreadful bankruptcy state, credit counseling can be a great solution.

Credit counseling is a service that provides effective solutions for dealing with individual debt problems. This form of counseling provides answers to help people get out of debt fast, giving personalized educational guidance on how to effectively manage finances. And for those with substantial debt, credit counseling provides services to protect them from bankruptcy.

This article will share with you the pros and cons of credit counseling, and what number to call for a 100% free consultation to see what your debt relief options.

Americans Need Credit Counseling Now More than Ever Before

In 2017, American households have accumulated an alarming amount of debt in various categories, a sign of significant financial instability. The four highest-ranking consumer debt categories in descending order are:

  1. Mortgage debt
  2. Student loan debt
  3. Auto loan debt
  4. Credit card debt

Source: Federal Reserve Bank of New York

(Want to speak to a credit counselling expert for a 100% free consultation? Call  877-534-8681)

The upsurge of debt in the American economy has resulted from people from various demographics. The executive director and chief economist from the Washington Center for Equitable Growth, Heather Boushey, has given a significant interpretation on these noteworthy findings. She mentioned that the American households appear to be using the debt mechanism to cope with an increased number of expenditures and high prices of necessary commodities and services. This indicates a mismatch between household income levels and price levels of commodities and services. The most evident example of this has been with student loans. The Bureau of Labor Statistics has reported that the Consumer Price Index for college fees and tuition exhibited a 63% rise between January 2006 and July 2016. Alongside this, there has been an increase in consumer prices of college textbooks by 88% and school housing (excluding board) by 51% within the same period.


Source: Forbes

The contribution to student loan debt varies based on many other factors as well, such as location. The three states within the United States which have the highest student loan debt per capita in the nation are Pennsylvania, New York and Michigan. Â  

Source: Forbes

Over the years, mortgage debt has increased due to a previously developed notion among the American population that homeownership would lead to wealth buildup. Because of this belief, there was a mortgage boom. Unfortunately, this resulted in the housing collapse, causing a major proportion of Americans to experience foreclosures and financial ruins in 2012. Furthermore, economists have recognized certain trends, which reveal a significant delay in household establishments and ownership for young adults as a direct result of student loan debt. A slowdown in mortgage lending has also been influenced by the rise in auto lending by 6% in the initial quarter of 2017. Â  In addition to this, surveys from September 2017 reveal that 38.1% of the American households carry significant quantities of credit card debt. And American households with the lowest average income have the highest average credit card debt..


Source: ValuePenguin

Another interesting finding is that the Northeast and West Coast regions of the United States have the highest average credit card debt.

Source: ValuePenguin

These recent findings have led economists to predict several upcoming defaults and bankruptcies for most of these American households who are in deep levels of debt. This is a crucial time when credit counselling can prove to be valuable in avoiding bankruptcies. Moreover, Americans will be able to better control their spending and recover from their debts through credit counselling.

(Want to speak to a credit counselling expert for a 100% free consultation? Call  877-534-8681)

How Credit Counseling Benefits Debtholders

Credit counseling can benefit everyone, whether they are debtholders or not. Acquiring credit counseling at an early stage of life before being deeply indebted might be one of the wisest financial measures to take. Credit counseling involves learning simple but significant ways to budget daily expenditures. This process also considers an individual’s income level, helping people to effectively allocate finances to their most necessary needs. Most importantly though, credit counseling provides relief for debtholders in various ways, which include helping people improve their credit score, ease debt repayments, and stop harassing creditors.

1. Good Credit Score

A good credit score can be difficult to maintain for an individual with debt, especially if they are constantly in need of loans for commercial or personal reasons. Without a good credit score, it can be nearly impossible to obtain a loan with low interest rates.

High-quality credit counseling services offer complimentary credit score checks and credit reports for individuals. Credit counseling experts analyze and interpret these credit reports, and offer step-by-step solutions to help people improve their credit scores.

When people are in debt, it can appear like all hope is lost. Credit counseling provides effective, proven solutions, and negotiate with lenders during the loan application process, giving hope to those in debt. Thanks to credit counseling services, people are able to receive the support they need to take positive steps to improving their credit and regaining control of their lives.

2. Ease Debt Repayment

Debtholders can largely benefit from credit counseling, helping them to significantly minimize debt in cost-effective ways, such as by lowering interest rates. This is particularly helpful for people with large amounts of credit card debt. By cutting down high interest fee charges as high as 10% annually, and simplifying the hassles of repaying loans, counseling services help those with credit card debt get out of debt fast.

Often times, people are overwhelmed by having so many different payments to make. To help those in debt ease their stress while saving money, credit counseling provides consolidation services to convert all the different payments into one manageable monthly payment. For example, if an individual has 5 different credit card payments, it can be overwhelming to keep track of payments. With debt consolidation, instead of having 5 different payments, all credit payments are lumped into one loan, often at much lower rates, allowing for one easy-to-manage monthly payment.

3. Stop harassing creditors

Creditors are known for harassing and overwhelming debtholders, making non-stop calls throughout all times of the day or night. As a result, debtholders tend to experience strong feelings of irritation and frustration, which often leads to unnecessary stress and worry. While it is the right of the creditors to contact debtholders to ensure the money borrowed is repaid, debtholders have rights as well. Credit counseling educates debtholders on their rights and what the creditors are allowed and not allowed to do. For example, to stop the harassment from creditors, debtholders are able to mention that they only want to be contacted through email, and not by phone. Additionally. creditors are restricted from:

  • Calling up debtholders at all hours of the day and night.
  • Calling up a debtholder’s   job location or company to determine their current employment condition

If a creditor is guilty of the infractions listed above, they can get into serious trouble. By meeting with a credit counsellor, debtholders can utilize various strategies to lower stress, stop creditors, and get their lives back on track. Credit counseling services can look at an individual debtholder’s situation and assess whether the creditor is using any illegal or unjust methods to collect the repayment of the debt. Depending on this assessment, correct actions would be suggested to the individual to stop harassment, and help to ensure a more effective line of communication with the creditor.

Interested in seeing what you qualify for?  Call  877-534-8681 for a 100% free consultation

How does Credit Counselling Work?

Credit counseling is available through both an online platform and a traditional, physical platform. The United States Justice Department has revealed that online credit counseling tends to be more popular and effective in this latest era of technology. The department has recently noted that 3.2 million consumers found online financial counseling programs to be convenient and helpful in 2010.

Credit counseling services may be either for-profit or non-profit. For debtholders already in a financial crisis, it is usually ideal to opt for a non-profit credit counseling service. This is because the non-profit counseling services often provide several complimentary services and charge reduced fees in comparison to profit-centered ones.

1. Debt Repayment Plans and Counselling

Overcoming debt is most successful with debt repayment plans and consumer credit counseling. Debt repayment plans provide flexibility for debtholders to solve the issue on their own or through a credit counseling agent. A counsellor will analyze all the debt-related information provided by the debtholder. Next, the counsellor will provide advice to help reduce unnecessary expenses en route to paying off debt—all while still maintaining an enjoyable lifestyle. During this process, the client’s debt will be consolidated, and interest charges will be minimized, helping the client save money while paying off the debt.

2. Debt Repayment Strategies

Credit counseling provides simple strategies to debtholders, giving them the tools to get out of debt on their own. By gaining the cooperation of the creditors, individuals are able to develop positive relationships with them, alleviating the burden of debt. This is done by explaining their financial instability and ensuring that they will be repaying their debt. This is usually done through a formally-written letter. To ensure a smooth repayment process, the credit counsellor ensures the debtholder remains honest and follows through with any payment deadline mentioned in the written letter. The debtholder is also reminded by the counsellor periodically to update the creditor with his situation.

An alternative way to communicate with creditors is directly through the credit counseling agent, whose negotiation expertise can lessen the burden of repayment.

3. Debt Settlement

Credit counseling provides debt settlement options, which are completed by debt settlement specialists. In this option, the specialist negotiates with the creditor to accept a one-time lump sum payment. Debt settlement is the most successful through highly reputed credit counseling services who have a highly skilled and experienced team of specialists.

4. Bankruptcy Trustee Referral

The worst-case scenario for both the debtholder and creditor is bankruptcy, which is only suggested after all other options have failed. During the process of bankruptcy, credit counseling specialists educate the client to understand the process, obligations, and consequences of declaring bankruptcy. Â  

Choose Credit Pros For Credit Counselling

Credit counseling can help debtholders understand their options and get out of debt fast. While there are numerous respectable credit counseling services, there are plenty of deceitful ones as well. It is best to research and confirm genuine testimonials before placing one’s full trust in a credit counseling service.

Fortunately, we have done the research for you. All you have to do is call the 100% free Credit Counselling Hotline. They have an A+ rating with the BBB and offer a 100% free credit counseling consultation to discuss your options.

If you are interested in seeing what you qualify for, you should call the Credit Counselling Hotline at 877-534-8681 for a 100% free consultation..  

Debt can be crippling and causes an enormous amount of stress. Take the first step to a debt-free life by using a credit counseling service. There is absolutely no risk whatsoever and it could end up being the best decision you ever made.  

If you are skeptical, you are not alone. One of my best friends used to be in a lot of debt and was extremely skeptical about credit counselling. I would tell him for months to simply call the number. He was so stubborn and refused to do it, until one day he tried. He didn’t get out of debt overnight, but by talking to the credit counselling expert, he was able to make a plan, become aware of his options, settle his debt for much less than he ever thought, and gain the guidance and support of an expert during the process. He now talks about it as one of the single best decisions he ever made in his life, and for the first time, he is debt-free.

If you are in debt, what do you have to lose? Call the Credit Counselling Hotline now at 877-534-8681 and see what your options are for debt relief.

Additional References:

http://www.nomoredebts.org/canada/credit-counselling.html

https://www.creditguard.org/blog/benefits-credit-counseling-mending-finances/