3 Ways That A Credit Counselling Service Can Help You

Law Blog

A credit counselling service is a great way to get help dealing with your debt, mostly because of the many different options that they can offer you. Three ways that a credit counselling service can help you are by arranging payment plans, money management, and financial counselling.

Payment Plans

One of the best options that a credit counselling service can provide is to help you arrange a payment plan with one or more of your creditors. In many cases, a creditor will be quite willing to work out a payment plan because they would rather be paid than force you into a situation where you have to consider bankruptcy and they get nothing at all.

In addition, if you approach your creditors through a credit counselling service, they will be more inclined to accept a proposed payment plan. The reason for this is the fact that you are working through a credit counselling service shows that you are making a good faith effort to pay your debts.

Money Management

A credit counselling service can also help you come up with a money management plan. In this situation, a credit counsellor will look at all of your debts, expenses, and income sources in order to discover if there is any way for you to pay back your debts without having to resort to a payment plan, consumer proposal, or bankruptcy.

In many cases, the counsellor may discover that if you cut back on certain luxuries, you would be able to afford to make your monthly payments on time. At that point, the credit counsellor will be able to provide you with a planned budget that you can follow to better manage your debt. Granted, you could do this on your own, but a credit counsellor has the benefit of being a neutral third-party that can take an unbiased look at your finances and see ways to save money that you may not have considered.

Financial Counselling

Finally, a credit counsellor can offer financial counselling in order to determine which of his or her services will be most beneficial in your situation. For example, a credit counsellor may recommend a bankruptcy if your income to debt ratio is at the point where no matter how you budget your finances, you will not be able to pay your debts back in a reasonable timeframe.

The counsellor may even recommend a consumer proposal in an attempt to salvage your credit if they believe that you can repay a portion of your debts. While a consumer proposal can still damage your credit, it is still better than declaring bankruptcy. The reason for this is that a consumer proposal allows you to negotiate lower monthly payments or a lower total amount of debt with your creditors so that you can pay them back.

Speak to a credit counselling service today in order to get assistance with your finances. A credit counsellor like one from David Reynolds & Associates can help you determine the right option for your specific financial situation, while also helping you create money management and payment plans.


9 April 2015