Credit counselors can negotiate debt management strategies with lenders on behalf of individuals with debt problems, as well as providing behavioral financial habit construction counseling.

Debtors seek out credit counselors to find out what their options are to get out of debt and to get some coaching during the process.

Credit counselors can be certified through several accredited institutions who are overseen by the Department of Justice in the United States, and they may be part of a non-profit organization, lending institution, or independent financial practice.

Credit Counselors might recommend a Debt Management Plan, and possibly negotiate with the creditors on the debtor’s behalf to have the interest rates on debt lowered or the late fees waved.

These actions would be taken after the credit counselor reviews the income, budget, and debt information of the debtor and has a good idea of what debt payments are possible. Debt Management Plans might take the form of a 60-month debt repayment schedule, during which time the debtor might attend counseling sessions, classes, and so forth, in an effort to learn better personal financial management behavior.

Budgeting skills and financial education are crucial to the success of a credit counseling relationship. Some situations may even require the use of a credit counselor, such as an application for a reverse mortgage, or a court order following civil proceedings.

Credit counseling can keep people from having to declare bankruptcy, or a counselor may guide someone through it if he or she is out of other options.

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