Unemployment, illness, and rising prices, are some of the reasons why people end up in financial difficulties. Those in trouble often have high levels of personal debt, and are not able to afford the monthly repayment schedule required by their credit agreements. No one should be forced to suffer like this, and it is also worth pointing out that it is always a bad idea to take on more debt to make the interest repayments on existing loans. Counseling services (credit or debt counseling) can be the first step to help many people. One of the solutions available to the counsellor is debt consolidation.
There are several solutions which can be employed to help people in financial difficulty. Some may only require a little simple help such as advice on personal budgeting, but others may need more structured help - for example setting up a debt management plan.
It is important that those in financial difficulty realize that not all organizations and companies working in this field are entirely reputable. The industry has been plagued by companies which prey on vulnerable people through hidden fees, or by encouraging the adoption of inappropriate solutions.
There are three main ways in which one can avoid these rogue companies. Firstly ensure that you deal with an organization which is prepared to thoroughly assess your personal situation as an individual - no debt solution is appropriate for every single person, and a company with only a single product should be avoided.
Make sure that you are dealing with a company which is prepared to provide clear, understandable information about any fees and charges. Also make sure that you will will receive regular statements demonstrating how your debt is being reduced.
Check if there are any relevant consumer protection codes, or trade bodies, in the locality where you live. If you choose a company which is a member of a trade body, then you will normally be able to check (via the trade body website) whether any complaints have been made against that company.
We have already seen that there are many different solutions to problems with indebtedness. Credit counseling should be the first step for most people. This will help identify all debts, assets, income, and will prioritize debts into priority and non-priority categories.
A reputable credit counsellor will help a person produce a realistic and credible personal plan to deal with their problems. When debt consolidation is the preferred solution there are normally two main benefits - a reduction in interest, allowing the debt to be repaid earlier, and a single monthly payment making life more convenient for the debtor.
There are several solutions which can be employed to help people in financial difficulty. Some may only require a little simple help such as advice on personal budgeting, but others may need more structured help - for example setting up a debt management plan.
It is important that those in financial difficulty realize that not all organizations and companies working in this field are entirely reputable. The industry has been plagued by companies which prey on vulnerable people through hidden fees, or by encouraging the adoption of inappropriate solutions.
There are three main ways in which one can avoid these rogue companies. Firstly ensure that you deal with an organization which is prepared to thoroughly assess your personal situation as an individual - no debt solution is appropriate for every single person, and a company with only a single product should be avoided.
Make sure that you are dealing with a company which is prepared to provide clear, understandable information about any fees and charges. Also make sure that you will will receive regular statements demonstrating how your debt is being reduced.
Check if there are any relevant consumer protection codes, or trade bodies, in the locality where you live. If you choose a company which is a member of a trade body, then you will normally be able to check (via the trade body website) whether any complaints have been made against that company.
We have already seen that there are many different solutions to problems with indebtedness. Credit counseling should be the first step for most people. This will help identify all debts, assets, income, and will prioritize debts into priority and non-priority categories.
A reputable credit counsellor will help a person produce a realistic and credible personal plan to deal with their problems. When debt consolidation is the preferred solution there are normally two main benefits - a reduction in interest, allowing the debt to be repaid earlier, and a single monthly payment making life more convenient for the debtor.
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