The need for consumer debt counseling continues to grow in America, and the reason for this is not far to seek. Easy credit, combined with seductive advertising, has made each of us a sitting duck for impulse buying. The result: a quagmire of mounting debts. The easy way out is to declare bankruptcy and absolve yourself of all commitments. But bankruptcy is a black mark both on your financial as well as personal credibility. Moreover it stays in your file for a decade.
The other option is to take a loan to pay off your debts. But if you haven’t been able to manage your debts in the past, it is unlikely that you will be able to do any better in the future. The best is to methodically work your way out with the help of a debt counseling agency.
A debt counseling agency works out a customized plan for you where you make one consolidated payment every month, based on a lower interest rate. This amount is then disbursed to the various debtors. A single payment means no misses and therefore no late fees.
The advantage of this option is that you are guided by professionals who have the experience of dealing with debt. No one sits in judgment; everyone tries to work out a solution that suits you best. The agency approaches your debtors and negotiates for a consolidated amount on lower rates and easier terms that leaves you with a single, easy to handle monthly payment.
You find that an erstwhile out of control debt-situation suddenly appears considerably less frightening. What’s more, you find that you can deal with the situation and come out tops.
Debt counseling agencies do not offer you loans; they only offer you a way out of your predicament. You are also taught how to exercise financial discipline so that you don’t get into debts again. The services of these agencies don’t come for free. Most of them charge a commission that may be as much as 10 per cent of your monthly payments.
Approaching a debt counseling agency is a healthy sign. Even creditors recognize that. It shows your intent to clear your debts. However, not every debt counseling agency is above board. There are several unscrupulous operators also. You must take great care in selecting the agency. There is no point in getting into more trouble.