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Why You Should Consider Debt Counselling As An Alternative Option

Why to consider debt counselling

When most of the people in debt find them on a stack of bills they are unable to pay being overwhelmed by debt often turn towards a credit counsellor. This seems to be a good alternative option as a proficient and expert debt counselling service can help them in more than one ways to get rid of the overwhelming debt. Most people now have credit cards in their wallet, multiple ones in it and use it more than often and mostly when it can be avoided. This way they slowly accumulate credit card debt.

One fine morning they realize that they have accumulated so much debt and interest that they do not what to do and how to get rid of it. People have different ideas and concept about debt and follow different ways to get out of it. While few are successful in their efforts, most of them are found to be still in debt and far away from their desired financial freedom.

  • Few take matters into their own hands and make their own decisions. Once again they make situations worse because a bad decision is what they have taken till date for which they are in this situation in the first place. They consider going for debt settlement or filing for bankruptcy are the best possible options available to them without knowing the consequences of both.
  • On the other hand, there are a few people who look for relief options other than debt settlement and filing for bankruptcy. They often find suitable financial products, tips, advice and ways in sites such as nationaldebtrelief.com and others for that matter. There are several governments as well as private financial assistance and relief programs that help people in debt, men and women alike, to come out of it.
  • Lastly, there is a third type of people who turn towards a professional credit counselling agency as an alternative option. These counsellors not only assist them to get rid of their debt but also help them to manage their finance well and get it back to shape. They will design a precise and doable budget, craft a better and more effective financial planner and provide professional and proven tips and advice to achieve financial freedom.
  • No matter whichever way you choose there are two things that you should know for sure: things will not happen overnight and you will need a lot of diligence and even may have to make notable changes in your habits and lifestyle to reach to your desired goal.

    The working process

    You will be offered with many different options and benefits if consider debt counselling instead of bankruptcy. All you have to do is find a reliable and reputable debt counsellor who will help you to change the financial condition around and even help you to prevent declaring bankruptcy.

    The working process of credit counselling is pretty simple and is done in a few specific steps.

    • First, the debt or credit counsellor will look at all your monthly expenses, bills to pay, your total income from all sources and especially your debts
    • Second, they will help you to set up a proper budget according to these facts and figure so that you can keep everything in order and save money to continue making your monthly payments
    • Thirdly and in addition to that, the credit counsellor may also negotiate with your creditors in order to get better terms on your credit card debts so that you can find it easier to comply.

    Once you start making the payments to the credit counselling agency every month they will send the amount as agreed to the respective creditors. While you are working with the credit counselor you should also play your role just as suggested by the counsellor and required.

    As it may be agreed by the creditors after the negotiation you must make sure that you diligently continue making the monthly payments to the credit counselling service.

    Remember, when you work as a team and as suggested it will make finance and debt management much easier. However, it is important for you to make sure first that the credit counselling service that you team up with is reliable because most are not.

    To do so you must:

    • Check the qualifications of the financial counsellor
    • Check with the Better Business Bureau for their quality of service and
    • The type of services that they offer and their pricing policy

    These checks are very important to make because when you use the services of a credit counselling agency it will inevitably put a mark on your credit report.

    Other useful alternatives

    Alternately, you can even seek help elsewhere if you are current with your debts as well as have enough resource to be able to make the minimum payments every month. As an alternative to credit counselling, it may be a very good and useful option you can opt for a financial planner. These financial planners will often charge you an hourly fee.

    This is a good option for those who are not much keen to invest time but want a good financial plan to get out of debt it will accelerate your payment with a better debt management plan. You may also find ways in which you may find some extra money to set aside to pay your debts.

    The most significant thing about it is that it will not reflect in your credit report as a credit counselling service would. However, the financial planner will not negotiate with your creditors to reduce interest rates or monthly payments.

    If you are not interested in visiting a financial planner you may also look for these options:

    • Take a class or visit someone through your church to get out of debt
    • Talk to your employer for any employee benefits program
    • Start a debt or budgeting group of your own to support each other or
    • Negotiate for better rates and monthly payments yourself

    However, the most rudimentary step is to create a budget, prioritize your debts and make payments continually.

    About the author

    Isabella Rossellini is a marketing and communication expert. She also serves as a content developer with many years of experience. She has previously covered an extensive range of topics in her posts, including business and start-ups.

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    Recommended reading

    If you enjoyed this post and have time to spare why not check out these related posts and dive deeper down the rabbit hole that is money management.

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