If you’re in as dire straits as many Americans are, your way of living paycheck to paycheck might have you on the brink of a very serious financial disaster. After paying your mortgage or rent, utilities and other bills each month, you probably find yourself feeling defeated and lousy. If you’ve racked up a few different debts over the years and you’re looking for a way out of the chaos, it might be about time for you to find a credit counselor that can work with you to make your life a bit easier.
So, if and when you find a credit counselor, you might be wondering how it is that they can make your financial aches and pains less of a problem. Credit counselors work for you in the sense that they reach out to individual lenders to lower your interest rates by as much as half with thorough negotiations. A very skilled credit counselor might also be able to help you create a customized budget, design a debt management plan, eliminate late payments and other fees, and administer payments to your lenders. If you’re trying to get a grip on your finances once and for all, these things could certainly help guide you down the right path. Keep reading for more information on what to look for when you’re trying to find a credit counselor.
Seek Them Out, Don’t Wait Around
You probably shouldn’t spring from the credit counselor that you found in a flashy advertisement or a late-night television commercial. The most reputable credit counselors depend on their past clients for references and they won’t be seeking you out via telemarketing or seedy emails for that very reason. What you want is a credit counselor that has proper certification who isn’t paid on commission: you’re not looking for someone who will rush through your case just so they can be paid as quickly as possible.
Go to a few different agencies and weigh your options before you commit. Starting with an internet search to find a credit counselor in your area is a great place to start.
Are The Associated Costs Worth It?
Of course there are costs associated with taking on the help of a credit counselor. No two financial situations are exactly the same, so you should be sure that the credit counselor you plan to deal with is willing to go that extra mile to devise a plan of attack that will best suit your needs. Make sure you’re made aware of the costs associated with hiring a credit counselor upfront. You might find that paying that credit counselor is just another expense that you can’t afford in your already-cluttered financial state.
You shouldn’t be spending more than $100 in setup fees and the monthly charge shouldn’t exceed more than $50. Monthly fees vary from state to state.
Designing a Debt Management Plan
Once you find a credit counselor you’re comfortable working with, you’ll have to provide detailed financial information from you income to the debts that you owe. It’s your counselor’s job to review your information and make recommendations about the best way to move forward. Your counselor should begin creating a debt management plan for you that allows you to repay your debts at reduced interest rates while also getting some late fees and other penalties erased if you’re lucky. It then becomes your responsibility to make payments to your credit counseling each month instead of paying off your various creditors with several different payments.
Things to Keep in Mind
- When you find a credit counselor that you feel is right for you, they won’t pressure you into working with them right away. They’ll allow you all the time you need to evaluate each of your offers before choosing one. Although it’s important to get a hold of your debts as soon as possible, you don’t have to feel pressured to make a hasty decision.
- Debt management plans only cover certain types of debts which don’t include mortgages or car loans. Find out which debts are included and excluded from your debt management plan.
- A successful debt management plan normally takes between 30 and 60 months to be completed. Most times, you can’t apply for any new credit or incur any additional debt while you’re currently in the process of a repayment plan.
- If you’re more interested in renegotiating the entire amount of your debt, you should be looking into debt settlement instead.
No one should have to live in fear of their mailbox forever. If you’re outstanding debts have gotten the better of you for far too long, you can make a change once you find a credit counselor. Get those debts in control and get on the right track to financial responsibility and freedom as soon as possible!