Debt reduction counseling is becoming quite popular these days as people are running out of money way before the end of the month arrives. Robbing from Peter to pay Paul is no longer working either since credit card companies are lowering people’s credit limits and increasing the monthly minimum payments on a regular basis.
What is a person or family to do when they have reached the maximum limits on all of their credit cards, personal loans, HELOCs, mortgages, car loans, etc.? There are several options you have, which include credit card consolidation, loan modification, restructuring, bankruptcy (last resort), and various other programs.
When you decide to go through debt reduction counseling, your counselor will analyze your income to debt ratio, analyze all of your bills and expenses and obligations, and help you decide what is the best financial route to take.
Getting an experienced debt counselor should not be taken lightly. Make sure they are qualified and have a proven track record. Don’t be afraid to ask for references and call those references.
There are many debt reduction counseling companies available today within your area or online. I personally would never pay a large fee for this service. I would work out an agreement with the company that they get paid based on the amount of money they negotiate off of the amount of money you owe your creditors. This way if they don’t reduce your debt, you owe nothing. If they end of saving you $5000.00, then their fee, if it is a reasonable percentage, is totally worth every nickel you pay them.
The best thing you could do for yourself and your family, if you are in a financial crisis, is to stop using all of your credit cards immediately. Put them away or cut them up. Make sure that all of your monthly expenses can be paid for with your current monthly income. If not, think about getting a second job for a short time until you can get ahead. There are many part time jobs still available today.
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