Credit counseling, according to this page, is the process that aims to offer assistance to debtors with their debt settlement issues. This is usually brought about by imparting knowledge on budgeting and the variety of tools available in this regard. The goal is to reduce and eliminate the person’s debt. There are many reputed non-profit credit counseling organizations which demand no payment for counseling. But there are organizations which label them as non-profit but charge with hidden charges in the name of donation request. Persons who have had experience using a credit counseling service can be the first preference to getting an idea of the counseling service in that area. The debt counselling Ottawa organizations provide a varied range of debt & credit counseling services in Canada.
The forum talk of www.bkforum.com states unemployment and underemployment are leading causes for filing bankruptcy, so the knowledge of handling debts through a proper counseling will help in avoiding situations like this. During the process of choosing a credit counseling organization the following facts should be had in mind.
Factors to be considered
The services offered by the organization, free materials, development plans, charges, mode of agreement with the organization, license of the counseling organization, qualification of the counselors, and reliability of the personal information given being kept safe are the factors or the questions to be asked on choosing a counseling organization.
Plan for managing debt
DMP – Debt management plan is suggested for the person who’s too much debt and repaying inabilities is the cause of all the financial problems she/he faces. These plans are managed by a certified credit counselor. DMP is a good plan for inefficient people, but a respected organization will always choose to educate the person to manage their money effectively by educating them on the skills. DMP works as the organization takes care of the repayment of debts and payment of bills at the appropriate time with the cash deposited to them.
Before enrolling on a DMP one should be clear on whether DMP is the only choice left, working model of the plan, the determination basis of the deposited money, receiving reports, types of debts included in the plan, any additional payment to debtors is present upon acceptance of the proposed plan, how does the plan affect the credit and any chance for the creditors to make the account current.
Going in for a credit counseling company is not the only choice left in handling the debts. By negotiating with the concerned debt holding companies one can find a solution in an alternative way.
When a person is turned down by the credit card company, she/he can find the contact number of the credit card company and can have a polite conversation with them negotiating the payment plan and writing-off of the lost credit score. By negotiating with the creditors, the for-profit companies may avail a reduction in the lump sum payment. There are debt settlement companies which request to transfer a specified amount till it reaches a figure that can pay an entire settlement to the debtor.
Bankruptcy has serious consequences, leading an individual to lose the financial status in society. Opting for a credit counseling organization is a big decision one has to take after trying everything personally with the debtors.