Credit Counselling Can Help Significantly
You can never guarantee that your financial health will stay good. If there comes a time when you are constantly stressed over money, talk to someone at a credit counselling agency. They will look at what is going on with your finances, work out a way to satisfy your creditors and keep your family with the necessities.
Establishing a debt management plan is the first step towards becoming debt free. Counselors will talk to your creditors and explain you are trying to find a way to pay the money you owe, but need some help. Sometimes you will make your payments to the counselling company and they will pay your bills.
It is common for credit card companies to lower the interest rate you are currently paying when they know you are working with a counselor. They may waive accrued late fees, and lower your minimum payments. It may take a few months of timely payments for them to make any changes that will benefit you.
The company you work with will need to have access to all your accounts. Once they start to work with you the accounts will be frozen. In most cases they will be closed once they are paid in full. You may be able to re-open a new account with the same company though.
Smaller monthly payments means you have more money to support your family. You will not need to worry about when each account needs to be paid; no more trying to shuffle payments. Your counselor will set up a payment date each month, or if you prefer, each pay period. You pay him or her, and they take care of the rest.
It will take a few months, but your credit report will show all your accounts as current. Anyone looking at it will see an area of late or missing payments, and then notice you caught up. There may be an annotation about the counselling, but this shows any future creditors you will do what is necessary to pay your debts.
If you file bankruptcy, you may be required to talk to a counselor before it will become finalized. The judge does this to make sure you understand better how to handle your finances. He wants to be sure you will not end up in the same situation again. If you are going for a Chapter 13 most judges will require you set up a debt management plan with a counselor.
Knowing when you need help and asking for it is sign of maturity and responsibility. Credit card companies know there are things you cannot always control when it comes to your income. They will be glad to help if they know you will be able to stick to the new arrangements, and credit counselling is where that all starts. Once you have a debt management program with a counselor administering it, any creditors will know they will be paid. They may not make all the extra interest, but at least they will not be losing the money they loaned you.
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