Debt Counseling Process

Debt counseling is a very helpful tool for those who have a large amount of debt and feel overwhelmed by the thought of tackling it on their own. Debt counselors are able to help the consumer with many financial matters. They can help lower interest rates, lower monthly payments, eliminate credit card fees or get them lowered, and even help lower the balance on some outstanding debts.

These counselors can also help their clients keep their homes or even prevent filing for bankruptcy. They are an immense help for getting back on track financially by helping their clients to address current spending habits and establish a workable budget to prevent future problems with debt.

The actual debt counseling process can be a little confusing to understand. Here are the basics of how it works:

Once the consumer submits and signs the debt counseling application form and sends in all accompanying financial documents, the consumer is protected from legal action from any of their creditors within five working days. The 債務舒緩後果 actual application process however can take up to sixty working days to complete.

During the application process, the debt counselor negotiates with the consumer’s creditors on the consumer’s behalf. The consumer’s creditors are notified with five working days of their request that they have applied for the debt review process.

Creditors then confirm that the outstanding amounts are correct. The consumer’s counselor uses this, along with the consumer’s monthly income to determine the debt restructuring proposal which is then sent to the creditors. If the creditors accept the proposal, it is finalized and sent in to the Payment Distribution Agency.

The debt restructuring proposal’s goal is to allow you to pay what you can afford and save money for an emergency fund. The debt counseling process if often the only way to go about getting lower, more affordable rates and offers. Most consumers dealing with debt have a natural fear of dealing with creditors. The debt counseling process can help you move beyond your fear and tackle your debts once and for all.

The debt management plan that you and your debt counselor come up with will only work if you stick to the plan and forgo any further spending on credit cards. Follow the plan fully and start saving if possible for your emergency fund which is invaluable in preventing future indebtedness. There is no shame in seeking professional help to improve your personal finances. In fact, by facing your debts head-on, you can reduce stress and get back on the right track toward financial independence.

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