Living beyond one’s means is a common phenomenon these days – a vicious malady afflicting today’s youth and mature adults alike. The craving to get the latest, the biggest and the best often at the cost of savings, leaves consumers with a rapidly depleting bank balance and a heap of bills to take care of. The more the consumers purchase beyond their power, all on the basis of credit, the more the accumulation of debts they have to clear. Most debtors have to seek the financial advice of debt counseling agencies to get clear their dues and get their finances in order.
Benefits of approaching a debt counseling agency for debt counseling help
- A good debt counseling agency appoints a qualified financial counselor who does a thorough study of your case. The debt counselor then points out the places where you could have avoided running a high bill or a bill at all for that matter. He/she will advise you on how to solve the current debt situation and how to avoid getting into the debt quicksand in future.
- The debt counselor is like your friend, guide and philosopher; for you to get the best results and the optimum value for your money you have to be completely honest with him/her. Ensure to take all the required documents of your debt for your appointment. The debt counselors require debtor’s proof of income and expenses for them to figure the finances available and accordingly draw up a suitable plan. Only when you arm your debt counselor with all the required ammunition i.e. information in this case, can he/she help you battle your debts successfully.
- The debt counseling agency will then get in touch with your various creditors and set up a debt management program whereby you can clear your debts at a much lesser interest fee.
- The debt counselor will then advise you on how to constructively channel your finances to not only expedite the repayment of your outstanding dues but also to run your regular unavoidable expenses.
Points to look out for before making the decision
1. Avoid debt counseling agencies that charge an exorbitant fee no matter how good they are. With the already over stretched budget you would require the utmost of your finances to clear your debts and not run up high bills as debt counselor’s fees read as future debts to clear the current financial imbroglio.
2. Ensure that the debt counselor you approach is professional and reliable. The best way to do this is to check their qualifications as well as enquire about their dependability from Better Business Bureau. It is advisable to approach debt counseling agencies that are accredited to either the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling. Or both.
3. Beware of debt counseling agencies that promise an overnight solution to your debt troubles or ones that undertake to terminate your debts with the help of legal procedures. Fake debt counseling agencies are out there in large numbers to dupe customers in a rush to get the load of credit off their backs. These debt counseling agencies make hay at the cost of customers who in their haste fail to make the necessary inquiries before hiring agencies to bail them out of their debt troubles.
4. While some say it is advisable to seek the help of debt counselors at early stages and not wait to be overwhelmed with debt, there is also the risk of getting a mark on your credit report for using their help. If you are able to make regular payments towards clearing your loans even though in small amounts, it is best to clear your debt on your own without the professional guidance by making small meaningful changes in your income vs. expenditure ratio.
Managing your debt and your finances on your own not only gives you the satisfaction of clearing your dues without tarnishing your credit report but also makes you more conscious of your expenditure pattern in future.