If you ever thought it would be nice to be more financially literate or have a professional help you figure out your finances without costing hundreds of dollars, then you might be interested in a nonprofit credit counseling agency. A credit counseling organization offers a number of services, including workshops and webinars, to help you understand your own finances better. But one of their biggest missions is to help people regain financial health through professional, low-cost, or free guidance.
Credit Counseling
Counselors at nonprofit debt management organizations are certified in credit counseling and, as nonprofits, they are required to offer counseling and financial education. Through one-on-one sessions, your counselor will take a close look at your budget, debts, and financial goals, then work with you to build a more efficient budget and a clear, personalized plan of action.
Debt Management Programs
For those who need more hands-on help, a credit counselor can enroll you in a debt management plan (DMP). Through the program, your counselor negotiates directly with your lenders to reduce your interest rates (often to as low as 6%–10%) and consolidates your debts into one simple, manageable monthly payment. Most people pay off their debt within three to five years.
Student Loan Counseling
If you need help managing student loans, a student loan counselor can help you with that as well. Counselors will educate you on the difference between federal loans and private loan options, as well as income-driven repayment plans and forgiveness programs. Finally, they can also help you create a repayment strategy that fits with your budget.
Bankruptcy Counseling
If you're considering bankruptcy, meeting with a bankruptcy counselor should be one of your first steps. They can help you evaluate whether bankruptcy is truly the right decision for your situation, or whether other options may be worth exploring first. If bankruptcy is the path forward, a counselor can walk you through the key differences between Chapter 7 and Chapter 13, and provide the education and guidance you need to rebuild your finances after filing.
Try It Yourself First: The Virtual Counselor Tool
Before reaching out to a nonprofit debt management organization, you might want to explore your options on your own. The My Virtual Counselor tool from CC of Minnesota let you review your debts and see how much you could potentially save through a debt management plan. It’s a great first step if you want to get a better idea of your options before speaking with a counselor.