An Overview Of Credit Counselling
Taking back control of your finances can be a lot easier if you take advantage of a credit counselling service. With expert help, you can find it easier to pay those bills that you are struggling to keep up with, and you can stay debt free permanently by coming up with a long term plan that takes into account your particular situation. The focus is to get you back to a place where you aren’t constantly struggling financially, by looking closely at your current financial situation and how to fix it.
Why Use Credit Counselling?
Your credit rating can fall very quickly if your car payment is regularly late, your mortgage payment gets behind, or you skip those monthly credit card payments. It can make it a challenge to be approved in the future for a credit card or a loan; in extreme cases, you can lose your car, your home can be taken away from you or you will need to file for bankruptcy.
It can be difficult and time consuming to bounce back from being bankrupt or losing your home, although it is possible to recover financially. However, getting your financial situation back under control is obviously important and that’s where credit counselling comes in.
How Does Credit Counselling Work?
Meeting with an experienced financial adviser is part of the process of credit counselling; they will look closely at your overall financial picture, including your expenses and income and create a strategy to allow you to become debt free and stay that way. Different approaches work better for different people; you will be provided resources and tools that you can use to make sure you adhere to any financial plan. One strategy is to extend the payment period on your debts so that you have lower monthly payments; lowering the interest rate on your credit cards and other loans may be possible too, after talking to your creditors.
The Benefits of Credit Counselling
Reaching your financial goals is much more realistic once you have a clear grasp of your financial situation and can take the necessary steps to fix things. Instead of trying to determine for yourself what to do, you’ll be given expert and unbiased advice that’s specific to your situation.
Carrying out your plan over months, even years is your responsibility once your plan has been implemented and you’ll be given all the support you need to do that. A debt counsellor can work with you to assess your needs and then find the best possible solution.
Are There Disadvantages to Credit Counselling?
You can end up being in debt for longer than you might be than if you entered into a debt settlement plan, as credit counselling doesn’t lower the amount of debt you have. However, if the length of time to pay your debts is extended, you may benefit from lower monthly payments or perhaps a lower interest rate. You may also find it a challenge to be approved for credit in the foreseeable future, as in Canada, credit counselling shows on your credit report as an R7. And your credit counselling company just may not consider you a priority as they are probably working for the companies that you owe money to.
Is Credit Counselling a Good Option for You?
If your goal is to avoid filing for bankruptcy, and at the same time take control of your finances, credit counselling can benefit you. However, you may benefit more from debt settlement, which means you can be debt free in about half the time and lower your total debt amount by up to 60 percent. You can have a free and no obligation consultation by completing the online debt relief form and looking at your different options can help you make the right decision.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.