Are you constantly falling behind on bill payments? Do you constantly make just the minimum payment on your credit cards? Do you continuously feel on edge? If your replies are in the affirmative, then you surely need debt counseling. But before you seek the services of a debt counselor there are a few things that you need to do.
To begin with, acknowledge that you have a bad debt situation. This act itself will make you more receptive towards counseling when it comes your way. Next, you need to find a counseling service that works for you. You will have to work closely with this service; which means answering several unpleasant questions and following rigorous financial discipline.
So, it is important that you feel comfortable with your debt counselors. Lastly, you must remember that getting out of a crisis should mean not getting into one again. This means that you must learn to spend within your means.
Once you sign up for a debt counseling program remember that it will reflect on your financial record and be seen as a negative factor during any future evaluation. This is only natural because a visit to a counselor means that you know how to take a loan but don’t know how to pay it back.
However, it also means that you are willing to take responsibility for your action and pay your dues, instead of not paying up at all and declaring bankruptcy. Which is why most credit agencies are willing to overlook these visits after a period of time.
So what does the debt counselor do? To put it simply, the counselor evaluates your situation and then calls up your creditors and negotiates with them on your behalf for lower interest rates or more lenient payment terms. Then, the person consolidates all your dues into a single amount that you pay off in installments. The installments are paid to the counselor, who, in turn, pays the dues to the various creditors. The counselor charges you for this service and may take the fee upfront or build it into your installment. Most counselors, irrespective of how good they are, charge the same. You need to do some research on their reputation to be able to separate the grain from the chaff.
So if you are sinking in debt find a counselor. There is nothing like a little bit of help when you are swimming against the tide.