The Ins and Outs of Getting Counseling for Debt Consolidation
Contributed by Melanie Vannuys
Do I Need Debt Consolidation Counseling?
Before you rush in and decide to file bankruptcy to eliminate your mountain of debt, debt consolidation counseling should be considered. The best thing to do before you rush into either debt consolidation or bankruptcy, is to make sure your situation really warrants one these drastic actions.
The only way to find out if you are truly in over your head when it comes to debt, is to go through all of your bills. Take a notepad or ledger or whatever your want to use and write down the balance of each account, the monthly payments, the interest rates, any fees that are applied monthly, etc. Then look at your income.
Are you only able to make the minimum monthly payments on your credit cards with high interest and a balance of thousands of dollars, it could take you twenty years or more to pay the balance. If this describes your situation, then you may need debt consolidation counseling. This isn't something to be embarrassed or ashamed of, millions of Americans do it each day. It just means that you realize you are in over your head and need help -- there's no shame in admitting that.
What's Involved In Debt Consolidation Counseling?
Debt consolidation counseling is not the scary thing that people think it is. Thanks to recent laws, a debt counselor is required to make you aware of your rights as a consumer. If you talk with a counselor or company that doesn't do that, then you need to look for one who will.
A legitimate counseling company will help you come up with a debt consolidation program that works for you. Usually this involves combining all of your unsecured debts, credit cards, hospital bills, personal loans, etc., into one monthly bill, thus one monthly payment.
