Most of these organizations are non-profit and funded in-part by the creditors. You make one monthly payment to the credit counseling service which can be the same as what you are paying now plus their monthly fees, then they disperse your payments to the creditors for you. Usually the creditors will lower the interest rates on your accounts if you meet the creditors requirements. You must remember that you are still paying back the entire balance plus interest; your creditors are not reducing any of the remaining balance that you owe, just the interest.
Missing one month’s payment can get you removed from the program by the credit card companies and many creditors will not allow you to re-apply into another program for a year or more. This means you are back in their hands of the creditors with high interest rates. Due to the rigid structure of this type of program close to 75% of people who enroll into credit counseling programs fail to ever graduate.
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