What free debt counseling services do

It’s easy to get into debt but very difficult to get out of it. In such situations you need the help of a specialist, and the best specialist is the one who offers free debt counseling. Such specialists give you useful debt management or debt reduction ideas without adding to your debts by charging hefty fees.

There are several free debt counseling services available to the common man. The first is the one that limits itself to offering advice only. These services examine your cash inflow and cash outflow situation, and the kinds of debts that you have accumulated.

Based on this, they suggest a plan. This may be a debt consolidation plan or a debt reduction plan. It may even be limited to advising people of the value of financial discipline. It is for you to make use of the plan. If need be, these services also speak to your creditors, and try to bring some relief. But largely they limit themselves to giving advice.

There are other debt counseling services that go further. They speak to your creditors and try to get a better deal for you. In return, you are required to deposit the monthly repayment amount in a trust. The counseling service then arranges to disburse this money among the various creditors. This is also a useful service because you are saved the bother of making multiple payments on time month after month. You also don’t have to deal with the creditors who can get very nasty once they realize that you are trying to avoid making payments.

You also have the option of taking help of non-profit counseling services that are run like charities. These counseling services do not contact your creditors or save you from the wrath of debt collectors but prepare a budget for you. They also insist on financial discipline.

The advantages of free counseling services are several. The biggest advantage is that every dollar that you pay goes into reducing your debt. You don’t have to worry about administration charges. Also, there is no set up fees or “deposits” to be maintained with the counseling services.

These services are run mostly by volunteers. They enjoy no benefits or perks like company cars, company telephones or expense accounts. In fact, the running expenses of these counseling services are drawn from sponsorships or donations.

However, not all free counseling services are genuine. Some are run by individuals who make use of the non-profit status to make money under different garbs. For instance instead of charging fees they charge “donations” from customers. It is therefore important to find the right counseling service.

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