Sometimes things happen in life that make your financial obligations impossible to meet. When you find yourself unable to pay your credit card payments and still provide for your family, it may be time to get credit counselling. You will not only learn how to create and keep a budget, they will work with your creditors for you. With their help, you will have your accounts paid off in less time.
Establishing a debt management plan is the first step towards becoming debt free. Counselors will talk to your creditors and explain you are trying to find a way to pay the money you owe, but need some help. Sometimes you will make your payments to the counselling company and they will pay your bills.
It is common for credit card companies to lower the interest rate you are currently paying when they know you are working with a counselor. They may waive accrued late fees, and lower your minimum payments. It may take a few months of timely payments for them to make any changes that will benefit you.
The company you work with will need to have access to all your accounts. Once they start to work with you the accounts will be frozen. In most cases they will be closed once they are paid in full. You may be able to re-open a new account with the same company though.
One of the biggest benefits of the program is having smaller monthly payments. You will have one bill to pay, usually to them, and they will divide it up. The amount will be less than if you were making each payment separately.
Within a few months, your credit report will show you are current on all your accounts. It will still show you did have trouble, but that you pulled yourself out of it. This is a good thing for companies to see, it means that you will pay your bills, even if you do get behind due to unforeseen circumstances.
If you file bankruptcy, you may be required to talk to a counselor before it will become finalized. The judge does this to make sure you understand better how to handle your finances. He wants to be sure you will not end up in the same situation again. If you are going for a Chapter 13 most judges will require you set up a debt management plan with a counselor.
Going to credit counselling does not mean you are not able to manage your finances under normal situations. It means that you know things have gotten out of hand and you need help to get them right again. It could be due to no fault of your own. Getting help, and paying your debts is much better than just ignoring them and hoping they go away on their own. Your credit report will be much better if you follow through with the debt management plan than if you had tried to pay your accounts haphazardly, missing a month or so with each while paying others. It shows you are trying.
![[Valid RSS feed]](http://www.infoblog.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
