How to Know if Credit Counselling is Right for You

Have you ever felt overwhelmed by your finances? You’re not alone. Sometimes that feeling can last for just a moment, such as when your debit card is declined for insufficient funds or your credit card bill seems higher than expected.

Sometimes it feels like the feeling will never end, for example, if you’ve been consumed by debt collection calls or that line of credit that never seems to get paid off.

The most important thing to know about dealing with your money is that you have to deal with it. Financial situations don’t disappear – in fact, they get worse if you ignore them.

So, how do you know if you’re in need of credit counselling? Here are some key indicators that you should seek financial help:

  • You feel overwhelmed by your financial situation.
  • Your income has changed and you can no longer meet all your monthly obligations
  • You need help creating a budget to better manage your cash flow
  • You want to get advice and/or learn about the options available to help you better manage your finances
  • Your financial situation is affecting your relationships
  • Your financial situation is constantly on your mind and affecting you at work

There are a lot of companies offering financial help, but not all of them will have your best interest at heart.

If you seek advice through a non-profit credit counselling agency, you can be sure that the agency will work with you to improve your financial situation without first resorting to bankruptcy.

The clients that come through our door want to pay their debts back, but they are not always able to. Our job is to provide options and respond to any concerns they may have. We have been able to build a reliable service where one of our number one referrals is friends and family, and where creditors work with us on proposals assisting the consumers with their financial situation.

What happens at credit counselling?

If your financial situation warrants, you will receive the option of a Debt Management Plan. A Debt Management Plan is a voluntary agreement between you and your creditor, negotiated by a credit counselling agency. Creditors adjust their terms so that the consumer is able to pay the debt back (on average within four years) by making monthly payments through credit counselling to the creditor.

A Debt Management Plan is different than debt settlements. Debt settlements are where the creditor is offered a lump sum payment for less than the outstanding debt. Debt settlements should only be pursued when there is a lump sum available and where the settlement takes place within a short period of time.

In addition to your Debt Management Plan, you’ll also get help to create a budget. We’ll look at your income and expenses and come up with a reasonable budget that you’ll be able to follow.

By budgeting and setting financial goals you will find your finances a little bit easier to manage. What happens when you have finished this process and cannot make ends meet? This is where you need to seek financial advice. When seeking financial advice, remember it takes time to assess your situation, you will need time to go through your finances and time to determine where you are headed.

Credit Counselling Services of Atlantic Canada has offices across Atlantic Canada. To get in touch for a free consultation, contact us today.

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