Monthly Archives: March 2018

Lets You Handle Finances Efficiently

In simple terms, counseling implies advising. In the same manner, debt counseling implies advising the person regarding his debt problem. Now a days various agencies provides debt counseling to a person who is facing problem in managing his debts.

Before the debt problem becomes more severe, the person requires a good advice to overcome the debt problem. These debt counseling agencies help the person to become debt free and also make them aware of factors, which are responsible for building up of the debts such as overspending, use of credit cards etc.

It is recommended to person burdened with debt, to go for debt counseling services. Sometimes it has been seen that the people go for various plans of consolidating their debts without having any professional advice. If by chance, the plans suits the person then it’s well and good, but if it doesn’t suit the person, needs and requirements, then it can put the person to even worst condition than before. So it’s better, not to take any chance with your credit position and your finances.

Today most of the debt consolidation agencies provide free counseling session to all its customers. In these sessions, the credit counselor analyzes the individual credit situation and suggests measures to overcome their problem of debts.

Getting professional advice make the task of handling debt easier and convenient for the debtor. Generally the person has other options, such as bankruptcy, in order to eliminate his debts. Bankruptcy affects the credit score adversely. But its better not to go for bankruptcy rather reduce the debt payment by consolidating them.

The agencies catering the debt counseling services not only guide the person but also help him in making repayments of the monthly installments. In other words, we can say that debt counseling services starts from advice to a person and ends only when he becomes debt free. But the condition is that the person must follow the instruction by the agencies.

Counseling sessions generally are on the topic such as money management. If somehow the person gets into the debt, the debt counseling services let the person know the various ways available to person in order to manage his debts. Finally, we can say that counseling lets the person know the difference between desires and necessity of life.

It is well said that a planned and right action taken towards right direction mostly gives a positive result, regardless of any uncertain situation arises. As this is the matter of your finances and the credit score, so the person must be careful in choosing the agency for their credit problem.

Credit Counseling

Specialists advise to contact your creditors immediately when you face difficulties paying your bills. It’s necessary to tell them the truth about why it has become difficult for you to meet payments. If they see your sincere wish to cope with hardships as well as with the debt it will be easier for you to work out a modified payment plan that will make your payments lower to some extent. Debt experts also say there’s no good waiting till your accounts will occur at a debt collector’s hands. This may become a point when your creditors “have given up on you”. To avoid this grief you need to obtain definite knowledge about debt and money management.

Unfortunately, most ordinary people lack this kind of knowledge. What common people know is that debts can be of two types – unsecured or secured. Secured debts are those which have been tied to an asset. The assets can also be of different kinds – it may be your car for a car loan, or your house for a mortgage. In the case you stop making payments, lenders have the right to repossess your car or foreclose on your house. Unsecured debts are those which are not tied to any asset. They usually include debts for various types of services (such as most credit card debt, bills for medical care, signature loans, etc.).

There can be situations when you can’t solve your financial problems even with the most desire and contacts with creditors. These are the cases when professional help is needed. Credit counseling company may become the source of the guidance necessary.

Credit counseling is a good option for those who are not disciplined enough and who have difficulties when creating a reasonable budget or repayment plan. There are numerous nonprofit credit counseling organizations that work with clients to handle their problems with finance. The service is different from company to company. There can be credit counseling companies that provide their service through local offices, the Internet, or on the telephone. The most convenient, perhaps, is to find a credit counseling company that offers in-person counseling. As debt and bad credits are widely spread phenomena in the U.S. you will have no difficulties in finding information about such organizations. You just need to ask you friends or just acquaintances, your financial institution or local consumer protection agency. Such safe referrals may serve to you as additional guarantee that you will turn to a reputable credit counseling organization.

These organizations provide rather wide range of services. It can help you with managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Only experienced specialists work at leading companies. Consumer credit, money, debt management, and budgeting are the spheres all the counselors are certified and trained at. All the contacts are held with the most attention to your requirements. You will discuss you financial situation with a professional counselor in details. You will be assisted and professionally guided when developing an individual plan to manage your money and debt. At the very beginning you will get an initial counseling session that usually lasts an hour. Then follows a suggestion of further on sessions. So, being provided with experts’ help you will definitely improve your financial situation.

Understanding the Ins and Outs of Credit

Credit counseling is an option for individuals whose personal finances have gotten to the point where they have buried themselves financially, either through lack of financial discipline, or from external circumstances out of their control. A reputable credit counseling agency should be experienced in finance and be staffed by professionally trained credit counselors.

Government approved credit counseling agencies by law are non-profit companies, meaning that their primary concern is their mission to assist those in need rather than to make a profit. Not all credit counseling companies offer the same services and although are primarily non-profit, they do not charge the same fees. Be sure to ask what services they offer before deciding which agency to work with.

Quality credit counselors will offer the following services:

Consumer Credit Counseling

They should offer at least one, preferably more, counseling sessions in which they advice you regarding your specific financial situation and the steps you need to take to improve circumstance. Areas covered should include, but may not be limited to budgeting, money management, credit usage, home purchasing plans (if you do not own a home), and personal savings goals.

Consumer Finance Education

Classes and/or seminars to assist you in learning how to better manage your money and how to use credit wisely. This education should be beneficial, informative, and to the point. It should make a difference in your financial future, if you apply the knowledge learned from the instruction.

Debt Management and Consolidation Plans

With a Debt Management Plan, a credit counselor basically takes over the maintenance of your unsecured credit accounts. The credit counselor will effectively consolidate your debt allowing you to send one monthly payment to them who in turn then makes payments on your behalf to your creditors.

A quality credit counselor will first notify your creditors of your participation in their Debt Management Plan and then negotiate with them for lower, if not waived fees, lower monthly payments, lower interest rates and account re-aging. (An agreement reached where the account longer is listed as delinquent on your credit report.

If your circumstance is due to external issues (such as a sudden job loss) debt management and discipline may not be your problem and a debt management plan may not be in your best interest so it is important that you find a credit counselor that will take the time to determine if this is a viable option for you to take.

Credit counseling has no immediate affect on your credit score whatsoever. The affect shows up after your debt is cleared and you have reestablished credit. However, your creditors are likely to indicate your participation in a debt management program in your credit file.

Whether your participation in a Debt Management Program will help your immediate ability to borrow money depends largely on who it is evaluating your credit. Some lenders will not work with consumers that are under debt management programs. Others lenders, on the other hand, view your participation in a debt management program as a sign of a serious commitment and willingness to meet and maintain your obligations.

Credit counselors will usually try to make a plan that will bring you to a debt-free status in 2 to 4 years. Credit counseling agencies also get funds from donations made by the public as well as contributions from other organizations. As a result, your out of pocket expense for counseling should be no more than $50 per month.

Another important aspect for you to be aware of is because they benefit when you pay your debt, credit counselors that offer Debt Management Planning receive additional funds directly from the lenders involved. This is a normal and accepted practice in the industry, being aware of this fact will assist you in your evaluation process when choosing a credit counselor. Counselors whose primary source of income comes from the lenders should cause you to ask yourself who are they really working for, you or the lender.

A sign that a credit counselor may be more interested in the kickbacks from creditors than your personal situation is that they only offer the Debt Management Program and the consumer education aspect is not made available, or is only offered through dvds and printed materials and the personal training, in groups or one on one, is not part of the deal.

Although there are several excellent credit counseling organizations out there, you should be aware that with the tremendous need and growth in the credit counseling industry, there has been an emergence of numerous firms calling themselves credit counselors when they are, and act as nothing more than an extension of the debt collection aspect of the credit industry itself.

In August 2006, President Bush signed the Pension Protection Act of 2006 which includes new laws that target unethical credit counselors. This is excellent news for you. Armed with the very specific knowledge brought forth in the Act, your awareness of exactly what a non-profit credit counseling agency should or should not do under the new laws places you in a position to locate a quality credit counseling organization, one that has your best interest at heart.

Credit Counseling

Credit counselling is a form of debt consolidation that anyone can get from a credit counselling firm or even your local bank. As the number one alternative for debt consolidation loans and bankruptcy – credit counselling means having or making a financial plan that works for your personal situation. So if you are finding that paying your monthly bills is getting a bit overwhelming, you should consider credit counselling before you file for bankruptcy.

Why is Bankruptcy Bad?

Bankruptcy can seem to be a best way out of an overwhelming debt situation – but you should consider all your options before resorting to bankruptcy. Bankruptcy affects your credit rating for quite some time. Though the reason one claims bankruptcy is because they can’t afford their bills, ironically, it costs money to go bankrupt. So even though it seems bankruptcy is the answer, make sure there isn’t a better way before you go entertain bankruptcy.

Debt Consolidation

Debt consolidation is a very common way to deal with financial distress. In a typical debt consolidation, existing debts and mortgage payments are consolidated into payment. Sometimes you can even negotiate a lower interest rate. For most, however, the term “Debt Consolidation Loan” is what people think of when wanting to get out of debt.

Consolidation Loan

You can approach a bank or financial institution about combining or “consolidating” your debts into one loan. Consolidating your debts into one loan often means paying only one bill instead of several. Even better, you get rid of any collecting companies that call you night and day to create even more stress on your situation. The bank pays off the outstanding debts and you instead owe one lump sum to the bank directly.

Getting quality credit counselling is critical in order to understand how to get out of debt. You can contact a credit counselling firm that specializes in debt consolidation. Or you can make an appointment with a financial advisor at your bank – it’s free. It really is possible to take back control of your finances with a little advice on how to handle money.