4 Things A Credit Counselor Can Do For You

Posted on: 3 August 2015

Are you having some financial woes? Do you think there might be a cause for financial alarm and the potential for bankruptcy in your future? Don't worry, there are myriad of different things you can do to help yourself out of the financial situation that you have gotten yourself into. One of the ways that you can help yourself is to seek out credit counselling services. There are numerous things that a credit counselor can do for you. Doing everything from helping you budget your finances to constructing a debt management plant, a credit counselor is, without a doubt, on your side. This brief article will serve to discuss 4 things a credit counselor can do for you.

Help You Make Sense Of Your Financial Reality

For many people, they do not understand how they have come into a bad financial situation. Credit counselors can help you make sense of this situation. A credit counselor will take a close look at what you earn, what your current expenses entail, your aggregate debt, how much you owe, what sort of interest rates you are paying, and any late fees that you are incurring due to possible late payments and other sort of fees of which you may be unaware. From here, a credit counselor might be able to help you get out of your financial woes by simply controlling the total of what you're spending, or they might help you construct a debt management plan.

Help You Create A Budget

Many people are unaware of how much they spend on a monthly basis and this often means going above and beyond the means of which they can afford. Helping you create a spending plan or a budget is a crucial part of what a credit counselor can do for you to help you escape the financial situation you have created. They will take deep notes and study where you are placing (or sinking) your money, then discuss with you which parts of your monthly or yearly budgets are considered non-crucial, in which case these expenditures will be eliminated or severely cut.

Debt Management Plan

A debt management plan is not always right for everyone, which is why a reputable credit counselor will take a look at your current financial situation and debt and determine whether or not it's right for you. Essentially, a debt management plan, or DMP, is a 5 year plan designed to work with your debtors and lenders to help you get back on the right track of being out of debt and completely paying off the debt of which you have incurred throughout the years. Many times, penalty fees are waived and the interest rate for your debt is considerably lowered.

Bankruptcy

A good credit counselor will level with you about the reality of bankruptcy, and the reality might be that you will need to file for bankruptcy (most likely either Chapter 7 or Chapter 13). About 10% of all credit counseling clients should file for bankruptcy, and a good credit counselor will usually tell you right away if you fall within this 10% of individuals. You can only file for bankruptcy after you have dealt with a reputable credit counselor. As such, a good credit counselor will be able to help you with many of the pre-filing and filing paperwork that is involved with bankruptcy, as they are quite familiar with the process.

A credit counselor can help you out with your financial situation in a myriad of different ways; this involves everything from basic advice to filing for bankruptcy. Consult with a local counselor today if you sense financial problems in your near future.

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