Credit and Debt Counselling: How to Break Free of the Cycle of Debt
The cycle of debt is a scary and unfortunately very common occurrence. The cycle occurs when continuous borrowing, to get ahead, eventually leads to more and more debt. Soon enough, interest charges become a significant cost which will make the debt get even larger.
Of course, escaping the dreaded debt cycle can be done on your own with reduced spending and budgeting. However, depending on the severity of your debt and how much you have, you may want some help.
There are many different options to consider when you want to get out of debt, but one of the best and most rewarding is to attend credit counselling. With that in mind, this article will teach you all you need to know about credit counselling, the many advantages it carries, and how to know if it’s right for you.
What is Credit Counselling?
Of course, we can’t dive right into the specifics without first looking at what credit counselling is. Credit counselling is a process and service that is used to help people get out of debt through a variety of tools, like education, budget creation, and personalized tips and tricks. It’s all about teaching people how to reduce and eliminate debt while implementing practices to that will help you stay out of debt in the future.
It is often done by a credit counselling agency that employ qualified and trained individuals who are experienced with helping people deal with their finances. While they can sometimes be free for certain individuals, most credit counselling agencies and services will charge a fee. Also, if you are going to file for bankruptcy, it is required that you attend credit counselling to ensure you get the help you need to avoid finding yourself in debt troubles again.
To learn about credit counselling in Nova Scotia, click here.
How Can Credit Counselling Help You Break Free From the Cycle of Debt?
If you are dealing with a lot of debt, you may be wondering if credit and debt counselling are right for you. There is also a good chance that you want to know how it can help you break free from debt and what the advantages of it are. Well, the first thing you can do is work one on one with a qualified financial professional.
These individuals normally have years of experience and can give your expert advice, and plans for getting out of debt. They will know exactly how to help you budget, cut costs, make payments, and more. In addition to that, the credit counsellor you find yourself working with can also help with debt consolidation, can negotiate with creditors on your behalf and help you work out a payment plan. These counsellors don’t only have the goal of getting you out of debt, they’ll also educate you to a point where you can avoid getting stuck in the debt cycle going forward.
All in all, there are many ways these agencies can help you, by offering your solutions that you simply wouldn’t be able to find if you tried to tackle your debt on your own. However, you still have to put in the work, it’s up to you to truly break the cycle of debt.
For more information about the revolving debt cycle and how to avoid it, read this.
How to Choose Which Credit Counselling Agency You Should Work With?
So, now that you know the various different benefits and advantages of credit counselling, how do you know which agency to go with? There is a good chance there are multiple different debt and credit counselling agencies in your city, but there are a few things you can do to ensure you select the right one.
Click here for some information about credit counselling in Alberta.
Do Some Research
First of all, you want to make sure the agency has a good reputation. They should have good reviews on reputable sites and it’s even better if you can get a first-hand account of what it’s like to work with them. You should also pay attention to their advertising and the claims that they have made, if they sound too good to be true, there is a large chance that they are.
Consider The Total Cost
Next, you want to consider the cost of the agency as different agencies will charge different fees for their credit counselling services. Some will be relatively affordable, while others will charge more. If you are seeking out their services, you are likely struggling with debt and credit issues, so cost can be a big factor in your decision. Of course, you should always ensure that the individuals at the agency are qualified to be working with you and giving you advice and guidance.
Make Sure You’re Comfortable
And lastly, you want to ensure that you are comfortable with the agency and counsellors you are working with. You are talking about a very sensitive topic, so you want to be comfortable with the situation through and through.
What Should You Expect When You Enter Credit and Debt Counselling?
It can be quite intimidating to walk into your first ever credit counselling session. The first thing to know is that everyone you deal with is a professional and will not judge or be subjective about your unique situation. Also, everything you speak about with the counsellor about will be kept private. They will treat you with respect and should never judge you for your decisions in the past, present, or future.
Your First Meeting
For your first session, you should come prepared with some materials to help brief your expert on your life and financial situation. This includes your personal information, your income, assets, debts, and your financial goals. Once they have this, they can start to see what needs to be done to improve your finances and finally get you out of the cycle of debt.
You and the expert will devise a plan and come up with a budget. It will then be up to you to implement it into your life. You will meet periodically with the counsellor and will of course be able to send them any questions or concerns you may have throughout the process. They will work with you and give suggestions on what to do, but the choice is ultimately yours when it comes to what plan you use.
Read this for information about credit counselling in New Brunswick.
Credit and debt counselling can be an incredibly helpful service in breaking free from the grips of debt. While you can, of course, escape debt without it, working with a trained and qualified professional makes it a lot easier. Hopefully, this article has increased your education on all things credit and debt counselling, and has given you all the information you need to decide if it is right for you and your financial situation.