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What is credit counseling and why is it helpful?

On Behalf of | Aug 12, 2019 | Uncategorized

Millions of Arizona residents have found relief in bankruptcy throughout the years. Overwhelming debt can create stress, anxiety, depression and hopelessness. Many times, the life events leading up to the excessive debt are out of your control, such as a medical emergency or the loss of a job. One option that helps those who are struggling to manage money before or after bankruptcy is credit counseling.

The Consumer Financial Protection Bureau explains credit counseling as a process in which you are taught to create a budget, pay off your debts and take money management workshops. Usually, organizations that provide credit counseling are non-profit organizations. During the process, you will meet with a credit counselor who will ask for an in-depth view of your financial situation and help you create a customized plan to get ahead.

Credit counselors often offer free educational workshops and materials, help you get a copy of your credit scores and reports, aid in developing a budget, give you advice about how to manage your debts and your money and pay down your debts by organizing a debt management plan. Counselors are usually trained in budgeting, debt and money management and consumer credit.

One option that credit counselors usually offer is the debt management plan. With this plan, you will pay an amount to the counseling service and they will then distribute the money out to your different creditors. They may negotiate repayment extensions, lowered interest rates and the waiving of certain fees. This is done to lower your overall monthly payment.

If you have debt you are unable to pay and are being harassed by creditors, you do not need to feel as if you are alone. Whether you opt for credit counseling or bankruptcy, a bankruptcy attorney can help you get your life back on track.

This is for educational purposes and should not be interpreted as legal advice.