Credit Consolidation Counseling

Credit counseling could be an excellent step for people who are deep in debt and on the verge of filing for bankruptcy. Obtaining accounts and other forms of unsecured debt is so easy and, unfortunately, too many people do not know how to handle such responsibility wisely. As a result, people without sound financial management skills end up drowning in debt. This affects their lives in profoundly negative ways. Seeking help from an advisor or through credit consolidation can help ease the anxiety and the frustration.

Financial advisors can act as a mediator or sorts between the consumer and creditors. As they work on the individuals credit consolidation efforts, they can negotiate lower interest rates and, in some cases, even lower the overall balance due. The credit counseling service will help a person establish a savings account that will allow the individual to deposit money on a weekly basis. The counseling service then uses those funds to pay off debts. Depending on the overall balance of what is owed and the amount the consumer is able to contribute toward paying off that balance, the length of the payment plan may be several years. It is important to keep in mind that debt consolidation is not a quick fix.

During the repayment process, the consumer should not use cards or apply for any additional funding. This part of the credit counseling may be the most difficult part. However, it may also be the most important. For many people, poor money management and impulsive buying are the key behaviors that brought them to need consolidation in the first place. Recognizing and modifying those bad habits is what will create long-lasting change.

Although the benefits of pursuing assistance are many, the consumer should know that there are potentially negative consequences too. For example, although the credit counseling service will probably not report prior delinquencies to the credit bureaus, the creditors that are negotiated with can report that the individual is not paying according to the originally agreed upon terms. This will adversely affect a persons financial rating or score. However, if debts are so high and unmanageable that the individual is seeking credit consolidation and counseling services, their credit score is probably already low. Working with a counseling service is still a better option than filing for bankruptcy.

Above all, it is important to remember that God expects the actions of His children to honor Him. This includes how people spend the money he has entrusted to them. It is important to repent, if necessary, and commit finances to His will. A person can prayerfully consider all of options, including credit consolidation and counseling, and proceed with faith. "But thou shalt remember the LORD thy God: for it is he that giveth thee power to get wealth, that he may establish his covenant which he sware unto thy fathers, as it is this day," (Deuteronomy 8:18)

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