Dealing with Debt

Credit Counseling and Budget Counseling FAQs

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Individuals who are in debt and are thinking about filing for bankruptcy may want to consider alternatives that are available. One alternative is to seek a credit counseling program or a budget counseling program. Counseling can be a tool that allows consumers to help pay off their debt in as little time as possible.

1. What are some of my options? – The goal of a credit counselor is to develop a plan where creditors are willing to lower the interest rate for a consumer and/or accept a lower monthly payment amount. This bankruptcy alternative often requires a consumer to enter into a debt reduction plan or debt management plan. Debt reduction plans are offered by most non-profit credit counseling agencies.

2. What all goes into a credit counseling session and what will I need? – Non-profit agencies that provide this service require a consumer to schedule a counseling interview either face-to-face or it can now be done online. Sessions usually last up to an hour and help consumers with any debt or financial concerns. A consumer needs to have various financial documents on hand during their consultation.

3. What other documents will I need? – Monthly bills are one set of documents that are needed at a credit counseling session. These documents include bills for loans, groceries, utilities, and rent or mortgage payments, etc.

4. How current do my documents need to be? – Credit card statements will also need to be provided to a credit counselor. Documents that are provided need to be within the previous 30 to 60 days. Copies may be made for online statements as long as they include correct balances and full account numbers.

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5. What if I’m facing possible foreclosure on my house? – Consumers that have a mortgage will need to provide a copy of the mortgage loan documents. Counselors will require any correspondence from the lender and a consumer’s latest loan statement.

6. Do the counselors need to see how much income I have coming in each month? – Verification of household income is also required by credit counselors and can include tax returns, pay stubs, or online statements for online funds transactions.

7. Will I need to show my driver’s license or some other form of ID? – Sometimes a valid photo ID is required in the face-to-face session and copies of letters that were received from any and all creditors. These will also need to within the previous 30 to 60 days.

All credit counseling sessions involve speaking with a certified credit counselor; even the online sessions must finish with a follow-up phone call with a counselor. They are there to help consumers by developing a workable budget to help pay down debt that is owed. This is done by discussing current financial problems and analyzing all the documents that have been provided.

The goal is to develop a custom Action Plan that includes valuable tips and suggestions for the consumer. They will also discuss the benefits of a debt management plan; if this is a viable solution. These plans allow consumers to pay off their debt within a set period of time, such as three to five years. The consumer will also save a lot of money in the end because the interest rates have been reduced and usually fees are waived as well.

Credit counseling sessions have no effect on the credit history of the consumer. Creditors will be able to see that you’re on a debt management plan from looking at your credit report, but it does not have a negative impact on your credit score. All counseling sessions are kept confidential and are 100% free.

If you’re in debt or would just like a better look at your personal finances, give Advantage Credit Counseling Service a call today at 866-699-2227! We are always here to help! If you have any questions that were not addressed in this post, please feel free to leave us a comment below and we’ll do our best to get you the correct answer. Thank you so much!

Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.