No question is wrong or “too dumb” when you are sitting in a credit counselor’s office. You cannot resolve a situation you do not understand.
Credit Counseling is for Wise People
If you are drowning in debt, and cannot seem to develop a way out, you understand that the problem is beyond your understanding and ability to control. You seek the advice of a credit counselor because you know that you cannot resolve the situation by yourself. Only wise people know when they need help. So, consider yourself wise.
Purpose of Credit Counseling
A credit counselor may provide a variety of services, among them the following:
- A realistic look at your income and debt to determine how and if you are able to meet your monthly obligations.
- Development of a budget and a payment plan which will get you out of debt as quickly as possible.
- Negotiation with creditors to lower total debt amounts
- Assistance in seeking a debt consolidation loan if one is warranted
- Education and training in personal finance so the situation won’t recur.
What You Should Ask
A credit counselor assumes that you have no understanding, and so any question you ask is normal, not “dumb.” You will need to fully understand what is going to be done and what consequences there are, or you cannot make wise decisions. The following is at least a partial list of questions you should b prepared to ask:
- How long will it take me to pay off my debt if I just make minimum payments?
- How do late and missed payments affect my credit score?
- How can I get my credit score back up?
- What affect does debt consolidation have on my credit?
- What affect does negotiation for a lower balance have on my credit?
- How long can I expect my credit to be affected negatively if I have missed or late payments or take steps # 4 and #5?
- Is bankruptcy an option for me?
- What kind of interest rate am I looking at if I get a debt consolidation loan? Over the life of the loan, how much is that really costing me?
- If I follow the budget you have devised, how long will it take to get my debt to a manageable level and/or to get it totally paid off?
As you go through the process with your counselor, other questions will naturally pop into your head. Be certain to ask them. It’s your money, your credit, and your future!
