It is truly a dark event in one?s life to be burdened by debt. Being in this difficult kind of situation can happen because of several reasons. It could be because of money management, or lack thereof, which leads to being unable to pay utilities and other financial obligations.
Moreover, a sudden emergency, health or otherwise, may force the person to borrow money from others, only to be unable to pay afterwards. Generally, there are ways to avoid debt from getting worse, but if he or she does not have the willpower, everything could come crashing down. It?s essential for someone? in financial trouble to find solutions before the debt collectors come knocking.
Getting out of it with credit counseling
The worsening debt situation is like digging a deep hole. A person in debt will realize later on that the hole he or she dug is too deep for him or her to get out of. However, there are some who find solace with credit counseling agencies.
Basically, these agencies house debt counselors who are highly-trained professionals who can lay out plans for debtors to achieve one simple objective ? to get out of debt. One prominent role that counselors play in alleviating the struggles of people in the proverbial deep hole is devising a debt management plan. This plan is primarily a repayment schedule, which is carried out once the necessary pieces of information are identified.
One of them is the amount of debt they are owed. Much of it is unsecured debt, but counselors also want to know the amount of secured debt (if any) to finally devise a plan. The counselors will then serve as mediator between the debtors and their creditors in which they?ll negotiate the total amount due at a lower amount and have the creditors cancel out the late fees.
Counselors can also look at the interest rates to which the debtors would be best-suited based on their situation. Generally, debt counseling agencies are capable of setting up schedules for debtors within a 2- to 4-year period.
Choosing the best agency
Fortunately, there are a lot of agencies who are willing to help someone in financial difficulty. Not all agencies are the same though, and the debtor must remember that they will have different plans for him or her depending on his or her situation. In choosing the best agency, here are some things to consider:
- The debtor must look for local agencies, credit unions, or educational institutions that can provide leads to debt counseling agencies who provide either free or low-cost services. They don?t necessarily serve as agencies themselves. However, these organizations provide referrals that can lead to the right debt counseling agency.
- ?The chosen agency should have been well-known for about 5 to 10 years. Such agency should also be non-profit. With these at hand, the debtor would know that it has not only stayed long in the business, but also provides free to affordable fees.
A debtor who takes serious consideration of all the credit counselor says and learns some money management skills, will be on their way to getting up that credit standing. Not only that, but their burden will be off their shoulders with credit counseling.
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About the Author
Daniel M. blogs and writes about financial and business issues. He has also done articles related to consumer credit counseling, credit loans and small business issues.
Source: http://www.informationgateway.org/credit-counseling-person-debt-benefit/
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