The first step to addressing your debt is acknowledging its existence and scope. This is also arguably the most daunting step because it requires you to take stock of your finances: the good, the bad and the ugly. But after you audit yourself, so to speak, you may be left wondering what’s next.

There’s a memorable moment in The Office when Michael Scott declares bankruptcy—by yelling this very statement out loud to his coworkers. Unfortunately, it’s not enough to state your intentions (sorry, Michael). You have to act to resolve debt and take the reins of your financial health.

Sometimes the only thing standing between you and tackling your debt is the anxiety that comes with doing it alone. After all, nobody is born knowing how to best handle money. It’s all a learning experience, and it helps to have someone in your corner walking you through your options and helping you act productively.

This is exactly why credit counseling is a tempting option for consumers looking to resolve their debt. While it is a viable option for some, it’s not necessarily the best bet for everyone. Some consumers need more heavy-duty solutions, like debt settlement. Let’s take a closer look.

 Credit Counseling: The Basics :

Consumers work with credit counselors for a number of reasons. A counselor may be able to work with your creditors to lower your interest rates. This is very useful for people paying high-interest rates on multiple credit cards, or even making minimum payments and watching as their debt grows. Credit counselors are also capable of working with clients to create a comprehensive debt management plan, which acts as a roadmap for what can be a confusing journey. They are also typically available to give unbiased advice throughout the process.

Many people find success with credit counseling. However, it’s just one of multiple strategies to pay off debt.

 When Credit Counseling Is Not Enough :

Resolving your debt is a matter of figuring out which course of action is best for your situation. Someone who has $3,000 in credit card debt is looking at a different journey than someone who has $30,000 spread across a wallet full of cards. There is often a limit after which credit counseling can no longer help—or at least not as the primary method.

As Bankrate writes, “The myth is that debt counselors have a magic wand in their desk drawers that they take out from time to time. This wand is supposed to make your debts, or your creditors, disappear. This would be a really nice trick, but it just ain’t so!”

For all its benefits, credit counseling does not reduce the principal amount of interest you owe. Consumers facing significant debt may want or need to explore a more far-reaching option, like debt settlement. This strategy hinges on negotiating down the actual amount you owe and agreeing to pay it off in a lump sum or series of payments over time. It’s an open secret that some creditors are willing to negotiate credit card balances down if they believe that the alternative is getting nothing. So, debt settlement makes use of this dynamic. Creditors may accept settlements as low as $.25 on the dollar, but many want $.40 or more.

Of course, choosing debt settlement comes with its own set of consequences—like reduced credit leading up to repayment because you’re diverting money from paying your bills to paying into an account that will eventually hold the lump sum.

Long story short: Credit counseling may be a great option for you. But it also may not be enough to address your current level of debt. Any good relief strategy begins with research.

Read Also :

• Understanding debt management schemes
• Lessons We Learned About Controlling Debt