With the current economic situation where many people have lost their jobs or just do not earn enough to cover their debts, consumer debt has spiraled. Many people are unable to pay their debts and many are opting for debt counselling services.
When you decide to go for this type of counseling, there are a few guidelines you should follow. These guidelines will ensure that you are not taken advantage of. You should make sure that the agency you approach is a member of the National Foundation of Credit Counseling. This is an organization that has been around for 50 years and has strict accreditation guidelines. Do not be misled by those organizations who claim to be non-profit, it does not mean anything.
If you communicate with an agency by telephone, do not hand over your bank account or credit card details unless you are certain that they are a legitimate organization. Confirm the fees that you will be charged. Do not believe those who state that they can wipe out all your debt.
There are agencies who offer free counseling and coaching sessions. Once you have found a suitable agency, there are certain documents that you should have available when you attend your first appointment. For your initial counseling session, you should take as much information with you in regards to your financial situation.
Either take all your creditor statements with you or make a detailed list of all your bills as well as your income. If you have a credit report handy, take that with you as well. Some agencies will be able to acquire a credit report for you, but you will normally be charged a nominal fee for this.
The counselor will do an in-depth assessment of your income and expenses and will find places where you can save. They will then devise a suitable budget as well as an action plan which should enable you to achieve your financial goals. This initial session will normally last between one to one and a half hours. Your counselor will discuss suitable debt management programs with you.
There are programs that you can use like debt management, consolidation and settlement. With management, the counseling organization will liaise with your creditors on your behalf. They will negotiate lower interest rates, stop collection calls and attempt to get over limit and late payment fees waived. Consolidation of your accounts should be discussed in depth with your counselor, as this may not always be suitable for your situation. You could end up paying more than you owe now. Account settlement might be an option for you, so you should discuss it with your counselor.
Learn more about the many benefits of debt counselling in South Africa now in our guide to debt help on http://www.debtcounsellinghelp.co.za