Credit counseling is a service offered to adults who have been unable to manage their debt and/or who have become so immersed in debt they are no longer to make payments in a timely manner. Such individuals need a variety of assistance dependent upon specific circumstances. Among the many things credit counseling can accomplish are the following:
- The design of a realistic budget within which the consumer can live and which allows for payment of all bills on time and a systematic plan for eliminating “bad” debt as quickly as possible. Ultimately, the goal is to establish a regular savings plan as well.
- Taking over the bill payments until the consumer has developed the knowledge and skills of personal finance to manage this activity himself.
- Assistance with the management of debt so that it is reduced and/or eliminated as well as tools for prevention of debt increase in the future.
- Negotiation with creditors to obtain lower payoff amounts and assistance with securing a debt consolidation loan if warranted.
- Ongoing counseling in the continued management of finances
There are a number of federal, state and local agencies which provide credit counseling services for free. A call to the city or county government offices will put you in touch with government-sponsored counseling. Many religious organizations offer free credit counseling as well, and, in most cases, an individual does not have to be a member of that specific faith. Catholic Family Services would be a place to start.
What Debt Management Can Do