When to Consider Credit Counseling

when-to-consider-credit-counseling

When to Consider Credit Counseling

Not only is credit counseling now a requirement when filing bankruptcy, but it is also a good idea for those who find that they are swimming in a river of debt without the proverbial paddle.

When you are in financial danger such as this credit counseling could be a great option and an alternative to filing for bankruptcy.

With the many different kinds of credit counseling companies that are available to you, it may be hard to differentiate between the good, the bad, and the ugly.

There are things you should be especially aware of and look for in any credit counseling company, there are some that are reputable, experienced, and only want the best for you. However, on the other end of that coin there are those that only exist to make life worse for you.

Credit counseling can help you eliminate the amount of calls you receive from various collection agencies, additionally they are specifically in place for those who have trouble in keeping up with their monthly payments. What a credit counselor will help you do is counsel you in creating a budget that will help you in keeping up with all your bills, household necessities, and living expenses. They will also work with you in arranging a type of payment plan that works well with your income and abilities to pay. It is important to note that in general credit counseling will only work with you on loans and credit cards that are unsecured. If you have trouble with your secured loans (such as your mortgage payments) credit counseling can provide you with advice on how you can deal with this situation.

Credit Counseling companies work closely with lenders that you have and negotiate acceptable payment arrangements for both the lender and the borrower. They will then help you create a budget that will allow you to afford the payments as well as other living expenses. It is important to strictly adhere to this budget in order to bring yourself out of your vast debt and avoid further collections, court proceedings, repossession, or bankruptcy. The budget may result in you giving up luxuries for the time being, however, eating a home instead of at a restaurant or giving up your shopping sprees, could prove to be far more beneficial in the long run than it would be finding yourself in such a financial situation that you cannot bring yourself out of.

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Moneywise Family

2 Comments

  1. Moneywise Family
    March 22, 2016 at 1:53 pm

    I think you make an excellent point in that credit counseling companies run from outright money grabbing scams to the very good. A lot of research must be done before entrusting one with your damaged finances. The last thing someone seeking financial counseling needs is giving up more money for zero value in return. Starting with a simple search in google or elsewhere “best credit counseling companies” will bring up a needed starting point in someone’s research. Checking client reviews and even better if you know someone who went through a similar situation getting their recommendation.

  2. Moneywise Family
    April 28, 2016 at 8:16 am

    […] some people actually end up in bad credit situations because of over spending and mismanagement, the majority of people who are finding it difficult to […]

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