It is estimated that Americans are $1.98 trillion in debt. For the consumer who is struggling to pay bills that might not be a lot of consolation, but it means that they are not alone. Many people decide to seek the advice of a credit counselor in an attempt to solve overwhelming debt. Understanding what debt counselors do is important knowledge for those planning to consult with one.

Consumers are in various states of debt when they decide to see a credit counselor. It's all about the ratio of debt to income, and realizing when things start to become too tight to keep up with monthly payments. There is no cookie-cutter plan to credit or debt counseling. The best counseling is on a case by case basis where interest is taken in the consumer's unique issues. Knowledge of different types of solutions will be presented, and a thorough understanding of debt consolidation, debt management, and debt settlement should be presented. Each works to help the consumer start to straighten out his financial situation, and each works to keep the consumer from being forced into bankruptcy, but good credit counselors will make certain the consumer understands what each one implicates.

The savvy consumer will ask certain questions when they first meet with a credit counselor. It is important to know how the payments are determined and what the amount will be. Asking about the lowering of interest rates, finance charges or late fees are also good questions. Are there any debts that might be excluded from a repayment plan? It is important to know when creditors have received the payments as is knowing what the ramifications are if you miss a payment or can't maintain payments. A consumer will also want to know how long it will take to pay off debts when using the recommended plan. Obviously, the quicker the debts are paid off, the less the consumer will be paying in interest.

A credit counselor will go to work negotiating with creditors to lower the owed debt amount or to establish a more workable plan for payment. They are basically the ones who take a pen to paper and work out all the numbers. For this, there are different fee structures, and a person considering the services should ask and know what they are.

During the credit counseling process, a consumer's credit rating may or may not be effected. Much depends on what appears on your credit report during a debt resolution process. If payments are on time, and there is notation that a credit counselor is being used, the interest rates offered may not be the lowest, but the rating should stay in tact. The notation, known as an R7 rating, will remain on the individual's credit report for two to three years after the credit counseling program is complete.