If the debts far exceed your financial capabilities to repay on time, you may consider credit counseling.
The easiest way is to try to search either online or in a phone book. First thing in mind you must always beware of possible scams such as promise to repair bad credit in very short time or create a completely new identity to rebuild credit. You should stay away from them if you feel too good to be true.
Trustworthy credit counseling companies will only accept you as their client if only youve passed some prerequisites. Although not all agencies adopt the same standard but generally you need to have a source of income and some unsecured debts. The reason is that they will be unable to help you if you have trouble with secured debt such as a mortgage or a car loan.
When you go to your first appointment with the credit counselor, you should have all the copies and statements from your current loans with you. These documents will help them to understand your situation well such as the amount of debts and required monthly payments.
From then on, its the counselors job. They will contact your lender and try to negotiate new payment terms and lower interest rates. You have the choice to manage the payments yourself of make lump sum payments to the counseling company and let them handle all the monthly payments for you. If you prefer the latter option, check their history records thoroughly and make sure they did not miss any payments. This is to reduce, if not prevent any damage to your credit history caused by the agency.
When the new payment terms have been agreed upon, the credit counselor will help you improve your financial situation by devising a new budget for you. Its the best advice to follow that budget plan to avoid any financial trouble in the future. There are even software programs they can offer you, that you can use yourself in order to plan your budget more efficiently. Even after the credit counseling service, you can rely on them for advice whenever you need it.
If youre willing to clear your debts in five years with lower interest rates other than filing for bankruptcy, let the professional credit counselor help you.
