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Consumer debt is at an all time high. In addition, the rate of default on credit card payments is soaring. Millions of Americans are headed toward bankruptcy. Learning to manage your debt through credit education may help you gain control of your finances. Bankruptcy is never a first choice. New bankruptcy laws require an individual to go through credit counseling prior to filing bankruptcy. If you are struggling with credit card payments, your next step is to join a Debt Management Program. This program will submit repayment proposals to your creditors. In addition, the program will negotiate a lower interest rate and monthly payment. If you maintain the payments, your creditors may even remove accumulated late fees. A Debt Management Program will help you get back on track. The program will offer credit education to provide you with tools to manage your finances in the future. The education will help you develop a budget and learn to live within your means. You can also find many debt counseling services online. You complete an online application. The application includes a list of all your creditors, balances, and monthly payments. For a monthly fee, the service will submit proposals to all of your creditors. If your creditors accept the proposals, collection calls will stop and you will make one monthly payment to the service. The service will distribute payments to your creditors each month. The payments are determined by the amount of your debt, your monthly income, and your monthly expenses. Most services require an automatic deduction from your bank account. However, if you do not have a bank account, some services will accept payments by mail. In addition to distributing payments, the service offers budget tools, savings education, and group support through message boards. Before choosing a program, research a few services. You can verify the company's reputation through the Better Business Bureau (BBB). The Bureau maintains ratings on each company and documents consumer complaints. Many of the best services are members of the BBB. In addition, you can visit the consumer reports website to obtain a list of reputable services. Gaining control of your finances will help you avoid bankruptcy. Your credit rating will drop initially. However, if you maintain your payments, your credit rating will begin to improve after six months in a program. You can save money on high interest charges and will eventually become debt-free. One condition of these programs is that you no longer use your credit cards. The goal is to learn how to manage your monthly expenses and avoid living beyond your monthly income.
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Credit Education, Debt Management Program,
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