If you are sinking financially due to heavy debt, you probably need help to find a way out. A debt counselor can be a lifesaver in this process. These are trained and experienced workers who deal with your type of problems every day. Most of the time, they have even dealt with your same creditors many times. You will find a number of benefits from seeking the help of a debt or credit counselor.
They will help you negotiate with creditors.
Almost everyone who gets into deep debt does so with the same set of institutions. Unless you are facing financial ruin from medical expenses, credit counselors should be able to come to your rescue. Debt management services that employ these counselors have agreements with nearly all credit card issuing institutions. Before you call, they already know how far the interest rates can be lower, under what circumstances a settlement may be able to be reached, and how much the smallest payment that can be accepted for your level of debt.
Debt counseling can assist you in reviewing your budget for areas to cut.
Although a debt counselor can get concessions from your creditors to lower your monthly payment, they know that these institutions want to see that you are making an agreement in good faith. This means that the counselor will go over your itemized income and expenses to arrive at a monthly budget. Each expense item will be reviewed and areas that are higher than an acceptable level will be reduced. This budget will be submitted to your creditors with the request for concessions.
A good debt counselor can advise you on acceptable debt levels for your income.
If you are in debt trouble, you need some guidance about how much debt you can realistically afford. While no debt is best, this may not work in the short run for you. You may have business expenses or credit lines that are used for business that will still need to be tapped for operating money for a while. The counselor can show you the figures regarding why or why not your use of these lines is doable.
Counselors will be able to determine if you can realistically manage your debt.
Some people are simply so far in debt that it is not feasible to consider repayment. Their ability to repay is miniscule compared to their indebtedness. In these instances, a counselor will be honest enough to tell you that your debt cannot be managed at your income level. Even with concessions from creditors, your only answer is to resort to bankruptcy. The counselor can advise you about how to proceed.
A debt management service can help you consolidate your payments.
Even if your monthly payments seem to dragging you to the bottom financially, a counselor can help restructure these payments to lower the overall amount. You may have payments that total $2,000 per month. Once the counselor works his or her magic on them, the new monthly payment might well be reduced to $1,500 or less. Instead of having five or ten payments, you will only have to make one to the debt service.
The debt management service will disburse your payments electronically to all of your creditors. Not-for-profit debt counseling services charge a small fee of $30 to $40 per month for managing your debt. It is worth every penny.