How Credit Counselling Works

You may or may not have heard about credit counselling; all it means is that a person will give you advice on how to manage your debts. If you do have debts and you are having trouble meeting the regular monthly payments then you may want to consider getting some credit counselling yourself.

The way credit counselling works is that you first have to make an appointment with an agency that offers credit counselling, for example, both the Citizens’ Advice Bureau and the Consumer Credit Counselling
Service both offer such a service. Both of the agencies just mentioned do not charge for their services, unlike many debt management companies on the internet. When you make an appointment to see a counselor you will be assured that everything you tell them is confidential and they will not disclose that information to anyone else without your permission.

When you go to your appointment it is a good idea to have a list of all the people that you owe money to. If you haven’t already written out a financial statement i.e. all your incomings and outgoings then the counselor can probably help you to do this. Once you have all of your financial details written down it is a lot easier to see where you can save money, if at all. The statement will also be useful if you need to give it to your creditors to explain why you cannot meet all of the payment that they are asking for.

The counselor will ask you all about your debt problems and then lay out all the options that they think are available to you. In some instances counselors may be willing to contact your creditors on your behalf and make an offer of payment. The counselor may also be able to negotiate lower interest rates on your credit cards, or even no interest for a certain period of time to help you catch up on your debts.

When you go to see a credit counselor all that they basically do is to help you sort out your financial position so that you can look at different ways of managing your debt. If there is no way that you can meet your creditor’s demands then the counselor may advise that the best choice for you is to declare yourself bankrupt. : Bankruptcy is a huge step and you should not take that step until you are really sure about what you are doing. In most cases however, a counselor will look for alternative ways to manage your financial commitments and become debt free.

An increasing number of people are now contacting agencies like the Citizens Advice Bureau and the Consumer Credit Counselling Service to help them sort out their finances and manage their debt. These agencies make no charge for their services and can be very helpful if you are worried about the level of your debt.