Do you think credit counseling can help you just to repay debts?
Do you need help to solve your debt problems? Are you thinking of filing a bankruptcy? Or, do you need to repair credit? In these 3 situations, you need to attend a credit counseling session to solve your financial problems. Check out these 3 scenarios when you need credit counseling help and what you can expect from such counseling sessions.
1. You want to manage your financial situation and debts
A credit counseling session may be what you need when you’re not able to manage your debts the way you want. In a counseling session, a credit counselor analyzes your financial situation. He/she takes into account your monthly income and expenses along with how much you need to pay back your creditors. This analysis helps the counselor to offer suggestions on how you can manage your debt/credit in a better way. You might follow the tips and suggestions and repay your creditors. However, if you’re not able to repay your dues even after following the suggestions, the counseling agency may offer you a debt relief plan. It’s a personalized debt relief plan with which you can get out of debt completely within a certain time period.
2. You want to repair your credit record and increase your score
Are you unhappy with your present credit score and need to improve it? Do you’ve to pay higher interest rates on your loans since your credit score is low? In such situations, you may need credit repair to raise your score. You can do it yourself or take professional help. If you decide to go for professional help, you’ll have to go for a counseling session with a credit repair organization. A counselor, on behalf of the credit repair organization, will analyze your credit reports from major credit bureaus to check negative items like late payments, charge-offs along with inaccurate items, if any. The counselor will then negotiate with the collection agencies, creditors and credit bureaus to remove negative listings from your credit reports and update the account statuses such that they’re less harmful for your credit score. He/she will also follow the procedure to correct the errors in your reports. However, you should know that certain negative items, such as a bankruptcy, cannot be removed from credit reports before a certain time period.
3. You have to file a bankruptcy to get rid of your debts
If you need to file a bankruptcy, you need to go for credit counseling from an agency approved by the United States Trustee. The counseling session should last for about 60-90 minutes. There is no necessity to visit a counseling agency. The session can take place over the phone or online. In such a session, a counselor will evaluate your financial situation, offer you a budget plan and discuss with you the alternatives to bankruptcy. This counseling session also helps to decide whether or not a debtor can solve his/her debt problems by following the budget plan offered by the counselor. You will also receive a credit counseling certificate, which you need to produce along with your bankruptcy petition while filing for bankruptcy. You need to go for such a credit counseling session within 180 days before filing a Chapter 7 or a Chapter 13 bankruptcy.
While seeking credit counseling for filing a bankruptcy, you should find out an organization which is approved in your judicial district. And, when you go for credit counseling to repay debts or to repair credit, it is advisable that you find a reputed organization. It should be in business for at least 5 years. You can check online reviews of customers to find a reliable credit counseling agency.