The cost of living is rapidly rising and unfortunately wages do not always seem to match this trend. This, and many other reasons, can cause people to accumulate large amounts of debt. Getting out of debt can be a complicated process for many. Due to this, some individuals seek the advice of professionals that can assist them with getting out of debt. These services are known as debt counseling.
How Does It Work?
When you visit a debt counseling service, you will be put in touch with your own counselor. This is the individual who will guide through the entire process. One of the first things that your counselor will do is take a look at your financial records. This will include your income, expenses, your assets, as well as all of your debts. This will allow to make an accurate assessment of your financial situation. It will also help to determine where you may need to reduce your spending.
The next step typically involves deciding on a debt management program for your situation. This is when all of your debt is consolidated into a single amount: https://www.debtconsolidation-loans.ca/debt-consolidation-loans/ You will then be able to draft a repayment plan with your counselor. This will depend on your income as well as the essential expenses that you will need to spend each month.
The final step involves going forward with a new lifestyle. Here, the counselor will teach you how to rebuild your credit that would have been damaged by your debt as well as the debt management program. Your counselor will also teach you better habits regarding balancing your budget. This will help to ensure that you do not get into debt again: https://www.debtconsolidation-loans.ca/debt-consolidation-strategies-for-canadians/
There are typically certain fees that you must pay for the debt counseling services. This can differ depending upon the agency. There are certain entities such as creditcanada.com that are non-profit organizations. They may be able to help you at a reduced cost or even for free conditional upon your circumstances. It is important to know all of the costs upfront, before you even go in for your consultation. This will help you determine exactly how much you are spending on this endeavour and whether or not you can afford it.
Avoiding Fraudulent Agencies
As with all services, there may be a chance that certain individuals will try and take advantage of those in dire financial straits. This is why it is important to check the accreditation of any and all of the agencies that you visit. To ensure that the debt counseling agency is a reliable one, there are many government sources that you can check. For instance, Credit Counseling Canada, the Canadian Association of Credit Counseling Services, and the Ontario Association of Credit Counseling Services: http://oaccs.com/ If you would like to know the experiences that other customers have had with a particular agency, you can check the Better Business Bureau. They will be able to tell you if any other clients have experienced any scams or fraudulent activities.
Success Rates of Debt Counseling
One of the most important things when considering debt counseling is to choose an agency that is legitimate and that is dedicated to helping you. This is a main factor when deciding whether or not debt counseling will be useful to you. The second is to take a close look at the repayment plan that you are given. In certain instances, it is not always tailored to the individual’s abilities or expenses. A repayment plan will only work if the individual can afford to pay it each month.
The positive aspects of a good debt counseling service, however, is that they will help to reduce the interest rates on the amounts you owe. This can make a large impact on how much you have to pay back each month. In many cases, a debt counseling service can get you a much better deal with your creditors.
Debt counseling is something that you should consider if you cannot get out of debt yourself. Make sure to thoroughly check on the service that you are employing before you do so. It is also important to commit yourself to the new lifestyle that you have created.