Debt Counseling Basics

Nobody sets out to amass debt. Too often, it's the result of expenses that are positive and life-changing: a college degree, medical bills, raising kids. Happily, all it takes is time and resolve to become solvent and start saving. Partner with a caring debt counselor and become a wiser consumer while making your way out of the debt spiral with debt consolidation.

Understand Debt Counseling

Not unlike psychological counseling, debt counseling consists of meeting with one or more professionals trained to analyze a consumer’s financial situation and then make recommendations that can include payments and debt consolidation so clients reclaim their fiscal health. Counselors may also help you set a budget to manage your expenses, walking you through your income, spending and debts.

 

Types of Counselors

There are many levels of professionals in the field of debt counseling. Some are independent contractors with financial backgrounds who are in private practice. Others may work for non-profit organizations, municipal or federal government agencies. The type of service best suited to your needs may come from any of these professionals, or from the debt relief company assisting you with your consolidation.

Where to Start

If you’re interested in debt counselling, cost effective resources are available to you. Turn to resources like your municipal government or health and human services non-profit organizations. You can also find help with the IRS, local universities or talk to some of the top debt consolidation companies who are there to help their customers build a secure financial future. Use the internet and talk to friends and family who may have received debt counseling help in the past.

What to Expect

Debt counselors typically help clients assess their total debt to decide what type of long-term financial solutions are required. Some help clients get debt consolidation assistance, negotiate with creditors and/or set up payment plans. Counselors may be able to arrange uncollateralized loans or secure funds backed by client assets (e.g., life insurance or retirement funds).  Every situation is unique, but you can expect to go through your assets and liabilities to find a debt solution that works for you. 

How Much Will This Cost?

Never decide on one debt counseling service until you learn about its fee structure and ask if there's a payment plan that suits your needs. One agency may have a standard fee schedule while another uses a sliding scale, basing fees on family income. Counseling may even be free, depending on the program offering it. 

Know Your Rights

Being in debt doesn’t give anyone the right to treat you badly or take advantage of you. Before you select a debt counselor, you have the right to ask for credentials attesting to the person’s and/or agency’s legitimacy. Request to see proof of licenses, certifications, or staff credentials and ask for a written guarantee of privacy.

So, Should I Find A Debt Counselor? 

Many debtors with bad financial habits are counseled to understand the circumstances that got them into debt in the first place. Many in debt simply need help knowing the options available to them and getting on the right track. In debt counseling, you can learn new behaviors, habits and practices to break the potential cycle of future indebtedness, and find solutions to your present debts. 

Never sign papers for counseling services until you’ve read every word. The Federal Trade Commission regulates debt relief services and maintains stringent transparency guidelines for your protection. With a qualified counselor by your side, you should be able to worth through your debt and start saving your money. 

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