Debt counseling requires investment on the quite expensive professional fees of expert finance or debt counselors. People having debt payment issues are usually advised to get proper counseling on how to get rid of the rising debt through effective financial management.
Inability or hardship to pay the debts is a sign of poor financial management. It is for this reason that debt counseling is needed so that individuals are properly assisted by experts in formulating an effective payment plan that will eventually pay-off all debts.
Aside from that, total debt payment must be done in the shortest possible time to minimize the total repayment cost. The longer it takes to pay-off the debt, the bigger shall be the expenses on interests.
Viability of Spending On Debt Counseling in the Middle of Debt Crisis
Opting for debt counseling remains arguable for some people. Spending on the required costs on debt counseling only adds up to the financial burden. This led others to question the viability of choosing this option as an effective method towards complete freedom from debt.
Despite the added expenses, there are actually many benefits that debt counseling services provide. Aside from giving valuable support in creating an effective payment plan, these services can also help in negotiating for better and lower interest rates from several financial and lending institutions. They can negotiate with the credit card company for interest rates on repayment option plans.
Some of them are even accredited counselors that enjoy special rates for their clients from some banks and credit card companies. This is due to the fact that these firms are further assured of payment of loans from people being fully supported in financial management by these financial experts.
Thus, when seeking for debt counseling services, make sure to choose the ones that are also accredited by the association of debt counselors, and also an affiliate of several financial establishments. Their connections with these channels can help in getting a consolidated loan with a lower rate for the payment of debts at appropriate terms that are easier on the pocket.
More Reasons for Debt Counseling
On top of the benefits mentioned above, there are still far better reasons for opting for debt counseling. One of them is protection from aggressive companies ready to offer bigger loans that provide opportunity to pay the current debts, but with much higher interest rate.
Aside from that, debt counselors can also provide priceless advice on the different ways of trimming down the expenses in order to get bigger savings that can be used for the payment of debts. This is a quite complex process that involves extensive analysis on the individual’s current financial standing, income, monthly expenses, and spending habits and financial behavior, including the present assets and liabilities.
But more importantly, debt counseling services can help in negotiating with the creditors to soften their legal actions against individuals who defaulted on their loans. They can act as mediator between the creditor and the debtor, and provide effective solutions that benefit both parties without going to the court.
Is Debt Counseling the Right Option?
Using the services of debt counselors may not always guarantee complete success in paying off all debts. Success may also depend on the level of expertise of the debt counselor, including the expert’s connection with various financial firms and lending institutions.
Thus, extra caution must be observed when selecting for the right debt counseling services. They must be fully accredited as well, for added assurance on their credibility and legitimacy. Their competence in the field of debt management and payment can make a lot of difference on the financial standing of their clients.
For several individuals with bankruptcy issues in certain countries, debt counseling is not an option but mandatory. For others with escalating debt problems, it would be better to seek debt counseling to avoid impending bankruptcy.