Is Debt Counseling The Solution?

Can debt counseling services offer a solution to your debt problems? To be able to answer this, we need to understand the debt counseling services and how they function. Well, debt counseling services are firms that are mostly sponsored by your creditors. Almost all of these service providers are non-profit organizations, though you may come across a few which function on their own. Having a source of income is an important condition for contacting a Debt counselor. The debt counselor will probably get in touch with the company you owe money and inform them that you are making an attempt to repay your loans. This counselor, after contacting the creditor, will try to achieve an agreement between you and the creditor. At the same time this counselor will ensure that the agreement is within your budget, keeping in mind your current source of income.

When the creditor receives their payment, this debt counselor will request your creditor to pay for their counseling by deducting small amount of money from the payment. There may be some counselors who will help you by waiving interest on the outstanding payment but this is mostly an exception than the rule. Inability to make your monthly payments may lead to imposition of late charges. Therefore, in order to repair your credit, you need to take charge yourself rather than letting someone else be in control.

By taking back the control that has been given to someone else, you have a chance of solving your debt problem without making your situation more complicated. Spending money only on minimum grocery and necessary items will help us in making more funds available for repayment. There are various ways in which you can cut back on your spending. For example for house cleaning you can use soap and water simply. You can use same cleaning item for windows, clothes as well as carpets.

Therefore, instead of wasting money for multiple products, we must find single product that may accomplish tasks. Let us not fall for the marketing gimmicks of companies that position one product as more efficient than other, thereby compounding your debt problems. Similarly reducing the number of trips you take assists you in reducing on many things like gas, food, hotels etc. Any solution that helps you in reducing your spending will repair your credit, as long as use the savings to pay your bills. So it may be a good idea to put off your plans for taking a trip or buying items for your house till you have paid all your bills. Paying your bills first will ensure more freedom for you to go for fulfilling your other desires. In case you find that you are facing problems in paying your monthly bills, we suggest that you get in touch with your creditors and apprise them of the ground situation.

It is likely that many of these creditors will like to work with you to achieve a workable solution instead of accepting the total loss. On the other hand, you should be ware of some greedy creditors who will demand their money immediately. To deal with such creditors you will need to pay the most critical bill and then work through the rest of them. Bills that classify under non-necessary bills must be terminated for a short while till you are able to repair your credit. These bills may include bills for cable TV, internet fees and other entertainment bill can be stopped for some time. We must understand that bills have become an integral part of our life and we can not solve our credit problems by delaying these bills. In conclusion, self-discipline and taking control of our credit problem and not the debt counseling is the solution for credit repair.