When Should You Seek Debt Counselling?
Being in debt and being hounded by creditors can be extremely stressful. To get you off this mess you can seek the help of a debt counselling service. A debt counselor will make a summary of all your debts and consolidate them into a single payment so he can work on reducing interest rates and service charges for delayed payments.
When you are faced with a huge amount of debt and are unable to find the right means to make monthly payments, a debt counselor is your best option to help free yourself of all your debts. Only seek the help of a debt counselor if you actually have a source of income to pay your debts and the only reason you are unable to pay is because of the excessive amount involved.
You normally do not accumulate excessive debt overnight. Take the case of a credit card debt. You use your credit card and make monthly minimum payments. There always remains an unpaid revolving amount which is subject to interest rates. You continue to use your card and make minimum payments. Additional interest rates will once again be charged. Before you know it, you have already accumulated a huge amount of debt.
Initially, you will try to negotiate for an extension with your creditors. But when the bills continue to remain unpaid, it is time to consider debt counselling. Make sure to choose a reputable debt counselor. Do thorough research and check on some feedback and reviews on the debt services he as positively accomplished. Thoroughly read through his credentials because he is supposed to help get you out of debt and not more deeply in debt than when you first met him.
Here are a few things to know about debt counselors, how they work and how to find a good one.
- There are a lot of available debt counselors. A good counselor is a professional that will analyze your individual debt situation and help create a feasible plan to get you out of your financial mess.
- There are some disreputable debt counselors who are more interested in service fees than in providing the debt services you need.
- Always choose a counseling service that is recognized by the appropriate credit agencies to negotiate debts in your behalf. He too must be a member of an accredited organization of debt counselors.
- Credit counseling must be part of the debt counselor’s services.
Here what your debt counselor will do to help you get rid of your debts:
- He will make an inventory of all your debts.
- He will create your monthly budget by taking into account your income against your basic living expenses to come up with how much you can afford for debt servicing.
- He will negotiate with your creditors the repayment plan he has devised while at the same time try to negotiate for lower interest rates.
- Once all your creditors have agreed on the repayment plan, you will remit your monthly amortization to the debt counselor who in turn will distribute the amount to your creditors.
Debt counselling is your best solution to being finally debt free. Choose a reliable debt counselor and work closely with him.
