Digging Yourself Out of Debt with Credit Counseling
Face Your Debt Head-On
One of the first steps toward getting yourself out of debt is to gain an understanding an awareness of your financial situation. All too often, when people are faced with mountains of credit card debt, the fear that comes along with it causes them to want to ignore the situation instead of tackling it. But the combination of missed payments and continued poor spending habits can, and will, prove to be disastrous.
Trained, professional counselors at a non-profit credit counseling agency can help assess your situation to come up with a plan that is appropriate for you and your specific financial needs. Together, you will compare your monthly income to your average monthly expenses. Ideally, income will outweigh expenditures, but individuals seeking credit counseling will likely be experiencing shortfalls. In this case, you and your credit counselor will look at where potential cuts can be made in your monthly spending in order to apply more money toward paying down your debts.
Debt Management Programs
Though many people are successful at digging themselves out of debt by setting and maintaining a monthly budget, some people may need to go a step further and take part in a debt management process. Through a debt management program, non-profit credit counselors negotiate with your creditors on your behalf to lower interest rates and even minimum monthly payments. And rather than trying to juggle multiple payments to multiple creditors, all of your payments are consolidated into one manageable monthly payment. The payment is made to your non-profit credit counseling agency, which then disperses payments amongst your creditors.
When selecting a credit counseling agency, be sure to choose a non-profit agency versus one that is for-profit. Although the services at a for-profit agency may seem appealing at first look, remember that their ultimate goal is to make money off of the hardship of others, and you will end up with even more expenses than you started with. A non-profit agency's goal is to counsel, not to sell, and you and your needs are their top priority.