Debt Counseling

2007-03-08 10:33:40

( Financial )



Debt Counseling
Debt counseling provides individuals immersed in debt with advice on how to meet their daunting financial obligations. The advice is given in private by a debt counselor. All the information you are asked to disclose remains confidential. Debt counseling is also called credit counseling.

The Rise of Debt Counseling
Debt counseling has become very popular because of the availability of consumer credit. People who are given credit cards but are not advised on how to control their spending often find themselves in a revolving debt. There are also people who are close to bankruptcy because they have misused proceeds from personal loans and now lack the ability to repay their debts.

Debt Consolidation Counseling
If you find yourself faced with multiple debts, you may want to consider availing of debt consolidation counseling. When you are faced with a mortgage, several credit card bills, and unpaid personal loans, you may feel paralyzed, unable to decide how to begin paying off your mountain of debts. A debt counselor will be able to advise you if it is a good option to consolidate your debts. Debt consolidation involves the combining of all your existing debts into one single debt which will be paid to an entity that assumes responsibility for your various debts. In other words, a new debt will arise which you will owe to one corporation only. Your old debts will be taken care of by the company providing the debt consolidation service. This service is different from debt consolidation counseling, which will only provide you with information, advice, and encouragement.

If you do avail of debt counseling services, make sure that you insist on being provided with an action plan. Ask your debt counselor to help you create a plan to pay off your debts within a specific period of time. Do not settle for simple advice like "lower your expenses," or "change your lifestyle." If you think you are receiving only general advice and not specific suggestions on how to begin recovering from debt, look for another debt counseling service.


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