Debt Free Destiny

If you find yourself behind in paying your bills, a credit counselor could be a helpful ally for you. Credit counselors work with you to strategize on the best options for assisting you with your financial concerns.

Up until recently the majority of credit counselors were largely through the National Foundation for Credit Counseling; however, that is not the case today. Credit counselors can be found in most any city. Because of this influx in the industry, be careful when choosing your credit counselor.

For your first counseling session, you should expect to provide your counselor with all kinds of documentation. Do not be surprised if your counselor requests you forward the records to him or her prior to your first appointment. The records your counselor will likely request will be as follows:

1) Your tax return for the last 5 years. Your tax returns will be helpful in painting a picture of your financial history.

2) A copy of your credit report if you have it handy. You can access your credit report for free once every 12 months from each of the three U. S. Credit Reporting Bureaus. Equifax, Experian and Trans Union are the three bureaus.

3) A complete listing of all your essential monthly expenses. To obtain accurate information, provide your counselor with a copy of your most recent statements. Keep in mind some of your statements might arrive electronically.

4) A complete listing of the bills you are behind on paying or are struggling to pay.

5) Your current mortgage statement and mortgage contract.

6) Documentation of all your assets. This includes your investments, your 401k, any certificate of deposits, your current bank statements and any other valuables or assets you might own.

Your credit counselor will provide you with a complete evaluation of your financial situation. Upon completion of the review, your counselor will work with you in creating a budget and he or she will discuss spending recommendations. An appropriate plan of action will be devised. If you have outstanding credit card debt, your counselor can advocate for a reduced interest rate for you. Depending on your specific circumstances, your counselor might recommend other avenues of assistance. If your situation is extreme, you might be eligible for debt reduction management assistance.

With debt reduction management, you make payments for your debt to your counseling agency and the agency pays your debts on your behalf. Under this system, your finance charges might be reduced or completely waived. 100% of the payments you make to the agency are applied to your outstanding debt.

You will be responsible for implementation of the action plan. Your counselor will hold you accountable by issuing you homework to work on between counseling appointments. At each subsequent counseling appointment expect to report on what you have accomplished since your last session and explain why you did not complete any actions assigned to you. An exhaustive review of your budget will occur at each appointment with your counselor. Failing to be honest with your counselor or painting your situation better than it actually is will only hurt you.