The use of credit counselling services can be an effective way for an individual to get out of debt. Such a service may also be useful for couples or business partners who have joint personal debts that they would like to resolve. How can talking with a credit counselor make it easier to get out of debt in an affordable and timely manner?
Some people believe that their only options are to pay their debts in full or file for bankruptcy. What they may not know is that you may be able to settle a debt for less than you owe or renegotiate the terms of the debt to make it easier to pay each month. Those who wish to file for bankruptcy may also not be aware that not all debts qualify for discharge or qualify for discharge right away. Having a thorough understanding of the choices available to a debtor may prevent an individual from compounding past mistakes.
A credit counsellor can help you take an honest look at your finances in an effort to help you make changes going forward. For instance, it may be possible to find ways to cut expenses or ways to increase income to make ends meet without changing your lifestyle in a dramatic manner. No matter how much debt you have, it is always easier to take charge of it and develop better financial habits when you know how much you make and how much you owe to others.
It may be possible for a credit counselling service to work with your creditors to renegotiate the terms of your debt. For instance, a creditor may agree to roll past due payments back into your loan with no fees or penalties. A creditor may also agree to reduce your interest rate or forgive a portion of the balance owed.
It is important to note that if some or all of your balance is forgiven, it may be subject to income tax in the year that it was forgiven. The credit counsellor who is helping you reduce your debt may also explain further any tax implications of the actions taken to achieve this result.
Credit counselling services can play a big role in helping an individual get out of debt or make current debts more manageable. Whether you have student loans, medical bills or business debt to repay, there may be multiple methods that you can employ to help ease the financial burden that you feel. The At Ease Credit Management Solutions website has more relevant information and resources available on their website.