If you are struggling with debt, then you will probably benefit from some credit counseling. If this concept is new to you, then you may be a bit apprehensive because you don't know what to expect. This is normal, and with a little information about how the process works, you will feel a lot more comfortable about accessing this kind of professional help to get you through your financial crisis. Here is a look at the important things you need to know.
The First Meeting
During the first meeting with a credit counselor, a review will be done. This review involves a look at your pay stubs. This will establish your income. It will also make you more aware of any expenses you may have. The aim is to create a profile that will include a list of your debts, a budget and a list of your assets. This first meeting will also look at any issues you may have that are contributing to debt.
A Debt Management Plan
Your counselor will work to help you prepare a new budget that will include savings and debt repayments. A debt management plan will usually require you to cut out unnecessary expenses. It may include things like eating in more or getting rid of your cable TV. Of course, these are just a few examples since everyone has their own expense profile. When your debt management plan has been finalized and is in progress, it will give you credibility before your creditors.
The debt management plan that you create with your counselor will be shared with your creditors. They will have the chance to reject or accept the plan. If they do accept the plan, you will be able to pay off your creditors based on the plan's requirements. Normally, you will pay money over to the agency that your credit counselor works for; this will be done every month. The agency will pay your creditors for you. In this way, they stand as a buffer between you and your creditors. This will give you the confidence you need to stick with your debt management plan.
Getting out of debt will probably be one of the most important things you will ever do. Enlisting the help of a credit counselor is a good way to get your credit back on track. Just be sure to follow the advice of your counselor.
To learn more, contact a credit counseling company.