What is Debt Counseling?

There is a lot of shame and stigma attached to debt. But the truth is that having debt doesn’t make you bad or irresponsible person. In fact, if you’re struggling with debt, you’re not alone.

Here’s the good news: if you’re ready to seek help and find a debt solution that works for you, then debt counseling might be able to help.

Debt counseling

Debt counseling is typically offered through credit counseling agencies and is often called “credit counseling” as well.

The process of debt counseling is simple: you meet (online, in-person, or over the phone) with a trained credit counselor. The counselor thoroughly reviews your finances and then makes personalized recommendations.

When you connect with a credit counselor, there are no fees or obligation to work with the company. In other words, it’s a win-win for your bank account.

Read more: What Does a Credit Counselor Do?

Debt counseling steps

Contact a counselor

The first step is to contact a debt counselor at a reputable credit counseling agency. You can usually contact a counselor by telephone phone 24 hours a day, 7 days per week. Remember, it’s free to call.

Review your finances

The goal for debt counseling is twofold. The first goal is for you to end the call or visit with a better understanding of your overall financial health. The second goal is that you’ll leave with a plan of action. In order to achieve those goals, debt counseling sessions begin with a thorough review of your finances—debt, income, savings, assets and more.

Receive recommendations

Here’s the deal—everyone’s financial situation is different. Because of that, your debt counselor will give you personalized recommendations based on your financial review.

The journey begins

After you receive your recommendations, it’s time for you to decide if you want to embark on your journey towards debt freedom. Once you accept the plan, the journey begins.

As part of that journey, many nonprofit debt and budget counseling agencies will offer additional services and programs to address your particular goals, including programs to help you repay debt, rehabilitate a delinquent mortgage, manage your student loan payments, and more.

If you’re ready to meet with a debt counselor or learn more about nonprofit debt consolidation, Money Management International has trained financial counselors who are ready to help.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.