You are probably familiar with the Credit Counseling Industry from the debt management plan proposals you receive from Credit Counseling Agencies (CCAs) on some of your customer accounts. For most banks, that is the extent of the relationship with CCAs, but for several banks, a more collaborative relationship has proven to be very beneficial for the banks and their customers.

Credit Counseling Supports Collection Efforts

Credit Counseling exists to help consumers get a better handle on their finances, especially when they are having trouble managing their debt. During a credit counseling session, a counselor completes a thorough review of the consumer's financial situation, prepares a current and projected budget, and provides recommendations and resources specific to their financial situation. If appropriate, the customer will have an opportunity to enroll in a Debt Management Program, which is a structured repayment program for unsecured debt where a consumer repays their creditors over a 3 – 5 year term. This is not debt settlement; consumers will pay 100% of their debt back, but at lower interest rates.

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