Credit counselors are yelling at you to come work with them. They are telling you they have the answer to solve your debt problems. Do they? Can they help you? It depends; they might help, but you must understand the nature and cost of their help. And accept that lasting debt relief needs lifestyle changes.
These counselors can help you juggle your finances by contacting creditors to lower your loans. But you must do the hard work of lifestyle change; that’s the only debt freedom path.
Should You Use Credit Counselors
So, should you use credit counselors? Before you decide to use a firm, do due diligence, which should include:
- Interview at least two firms—for profit, and nonprofit. Remember, they are salespeople, so look beyond their facades.
- Work with a licensed counselor only. But before you decide, check out the firm’s complaints’ record with the relevant government office.
- Make sure you understand what they do, and their fees. Don’t focus on the fee alone, study the package.
- Ignore testimonials on websites; ask to speak with someone who has been through their program. Privacy issues might prevent this; but, some folks might volunteer to discuss their experience.
- For the nonprofit firm, check if in a conflict of interest. Is it linked to a lender? If the counselor works for a financial firm, make sure you understand the relationship.
- Discuss this journey with your spouse and someone knowledgeable with the procedure.
- Sign an agreement only after you understand your responsibility and the firm’s role.
- If you are a Christian, ask the Lord to guide you.
Credit Counselors to Avoid
There are credit counselors with whom you must not do business. If they tell you their program is easy, and it sounds too good to be true, it is not true, flee. Besides, don’t sign with credit counselors if they…
- don’t stress that you must budget and make lifestyle changes.
- don’t understand you and your journey.
- are in a hurry, and rush you to sign an agreement.
- won’t give you information you request before they ask you to sign up.
- won’t allow you to talk with a previous client, with that client’s consent, before signing.
Can You Get Out Of Debt Without A Credit Counselor
- You can do it alone with help and encouragement, but it won’t be easy. First, you must accept your situation and do needed lifestyle changes.
- If you are a Christian, as you repent, confess prior abuse of His funds, ask the Lord to should you how to move ahead.
- Go on a spending fast for one month to identify your spending habits, and spending drivers.
- Do a simple financial plan, and a budget.
- Prepare a debt repayment schedule showing how much you can afford to repay.
- After prayer, and feeling confident you can honor your commitments, contact each creditor and ask for relief. With a credible plan, likely, you will get help. However, you must follow the plan.
- Ask a trusted person to hold you accountable.
Summary
Credit counselors offer a service that could help. But, you do the work—you must make tough choices. They give a framework to help you follow a payment plan. Here is the real issue: do you need a credit counselor to encourage disciplined lifestyle adjustments to become debt free? That’s your call.
Copyright © 2011, Michel A. Bell
Hi Michel
Nice article. I agree with you when you say that you also need to work on your lifestyle change. The big mistake most people make is to think that counseling is the easy way out. But in fact you also need to do your part in the process.