Several approaches can be taken to tackle various debt issues. If you are unable to pay off your debts in full, then it is still preferable to pay off some of it than to let the entire amount go overdue.
It should also be noted that collection firms aren’t legally obligated to agree to any given payment plan either. How much you can afford has little to no influence on how debt collectors will act towards you.
They do not have to agree to your debt repayment proposal, and collection agencies are known for being ruthless in their methods, with many bordering on outright hostility and harassment.
If you are looking to make a fresh new start and solve your financial problems as soon as possible when working with a debt counsellor is strongly recommended. Here, we will discuss the benefits of working with a debt counsellor to eliminate your financial woes.
What is Debt Counseling?
A debt counsellor is essentially a debt advisor. They will provide you with sound credit counselling. If you are dealing with insurmountable debt and are concerned about declaring personal bankruptcy, then enrolling in credit counselling is strongly recommended.
Debt counselling is a legal process that will allow you to be named over-indebted. The counsellor will work with you to structured payment plan that will enable you to get back on track without having to resort to personal bankruptcy or other drastic measures.
How Does Credit Counselling Work?
You will first be asked to enroll in a debt consolidation plan. Your credit counsellor will go over your financial situation with you during your credit counselling session. By doing so, they will be able to determine the full scope of the issue at hand accurately.
The route ahead may be treacherous, but your counsellor will help you navigate through all of the pitfalls so that you can return to a normal lifestyle as soon as possible.
Moreover, by identifying the root cause of your fiduciary distress, they will help teach you how to prevent financial issues from reoccuring in the future.
A certified counsellor is essentially a financial guru who will teach you how to manage your finances better to be more fiscally responsible in the future.
Is it Smart to Settle With a Debt Collector?
Debt settlement is a service that a third-party company provides. They will try to reduce your overall debt by reaching a mutually beneficial settlement with your creditors. They will contact your creditors on your behalf to try to settle your debt as soon as possible.
A more suitable payment arrangement is usually agreed upon after some tough negotiations. You should always try to pay off the entirety of your debt whenever possible.
Also, settling your account will have a much smaller impact on your credit score than choosing not to pay off your debts at all. By settling with a debt collector, you will usually be able to lower the total amount of debt you owe, which will save you some money.
Furthermore, settling with a debt collector will help prevent the need to declare personal bankruptcy, which will allow you to borrow money in the future should you need to.
Yet another benefit is that you will stop being hounded by collectors and creditors, allowing you to enjoy your life and focus on other matters.
Benefits of Debt Counselling
Once you have joined a debt counselling program, your creditors will not be able to take any legal action against you. As such, debt counselling provides clients with legal protection against vindictive collection agencies and creditors.
Furthermore, you will not have to worry about your debt counselling sessions being added to your permanent record. No one will be aware that you joined a debt counselling program unless you choose to tell them.
Yet another benefit is that you will only have to make a single payment every month instead of making multiple payments to multiple creditors: This will allow you to manage your debts easier and more efficiently, ensuring that you will never miss a repayment.
Another advantage of debt counselling is that your most basic and immediate needs will be given precedence. In other words, your basic needs will be prioritized before any provision is made for your debts, so you do not have to worry about going hungry or becoming homeless.
You will only need to pay what you can realistically afford each month. The intimidating and harassing calls from creditors will also cease once you have entered a debt counselling program.
Your debt counsellor will try and negotiate the best terms in order to benefit you. Many people dedicated to their debt counselling plan will be able to pay off all of their unsecured debts within three years.
In sum, debt counselling is designed to help people pay off their debts and change their financial spending and borrowing habits to avoid falling into insurmountable debt in the future.
It will help provide peace of mind and reduce stress to focus on other matters, such as family and their careers.
While a debt counsellor will work on your behalf to negotiate beneficial terms with your creditors, a debt counselling program is not a free get out of jail card. The goal of debt counselling is to teach you to be accountable and make your debts more manageable.
If you fail to adhere to the terms outlined by your debt counsellor by missing a payment, then your agreement with them may be terminated.