2 What to Expect from Credit Counseling

Across the country, many people are trying to juggle overdue bills while living from paycheck to paycheck. Credit counseling can often provide the tools and resources consumers need to assist them in learning how to develop a good budget and get on track financially. When you first consider working with a credit counseling company, it is quite common to have questions about what to expect.

A reputable agency will provide you with advice regarding money management, as well as assist you in preparing a budget. They will also often provide you with complementary money management resources and workshops. Be prepared for the initial counseling session to last a minimum of one hour. During the initial session, your counselor will perform a careful review of all of your current debt. At this time, you will need to be prepared to discuss both your income and expenses. It can be beneficial to have all of your bills and statements readily available for this review. Although you may find it uncomfortable to discuss you finances, it is much better to be open and honest regarding your current financial situation. You are certainly not alone in your situation. As of today, there are many people facing financial hardships through no fault of their own.

Your credit counselor will discuss your financial situation with you in detail and develop a plan that is personalized to your situation. Based upon the amount of debt you currently have, your counselor may also recommend a debt management plan that will allow you to make monthly debt payments directly to the credit counseling agency so that they can disburse the payments to your creditors. In turn, they will pay your creditors on your behalf. This can often be beneficial because the counselor will be able to lower interest rates and negotiate late fees with your creditors.

If you have reached the point where you are being harassed by creditors and collection agencies due to late payments, a credit counseling service can also help to put a stop to collection calls. This alone can prove to be a tremendous relief. Your credit counseling service can also provide you with an array of educational tools that can assist you in learning to plan for financial emergencies. If you are considering buying a home in the future, your counselor can educate you about what you need to know before making such a large purchase. Credit counselors can even assist you in getting back on track if you are having difficulty making your mortgage payments. Follow-up sessions may then be scheduled as needed to help you stay on track for reaching your financial goals.

Credit counseling may be beneficial if you find that you are not able to pay the minimum balances on your credit cards every month or are consistently late on one or more bills.

By working with a reputable credit counseling service, it’s possible to take control of your finances and develop a debt management plan that will assist you in budgeting your income and paying off your debt quickly.

Jennifer Willard is a freelance writer and blogger. She writes for her own personal finance blog and is a contributor for CreditGUARD, a non-profit debt counseling agency.