People with huge debts on their credit cards usually tend to make the minimum payment every month to pull on. However heavy rates of interest and penalties will swallow these small payments and the total debt will go on fattening up.
In an effort to reduce your debt, you may make some payment to reduce some small bits of debt but you may not be able to even scratch the bigger debts. A qualified credit counselor at this stage can come to your rescue. He can offer you help to reorganize your personal finances and suggest you ways to reduce and pay off the debts within a short time.
If you opt to go to a credit counselor, you can get a lot of benefits, which you may not be able to avail on your own.
1. The reduced rate of interest on your debts - The normal rates of interest charged on your debt could be 20 per cent or even more. These rates are the main culprits to keep you all the time in debts. A counselor can negotiate with your creditors to reduce the rate of interest which will translate into overall lower payments and consequently into increased cash flow available for clearing your dues.
2. Stopping those pressing phone calls and threatening letters - It has become a usual practice for creditors to call and threaten with legal action for just one or two missed payments. The collecting agencies are much more aggressive than before. Their reminders can increase your stress severely. The counselor will end these threats by acceptable and reduced terms of payment. The relief from stress alone is worth the service of a credit counselor.
3. Avoiding the risk of losing your home in foreclosures - The rates of foreclosures are at peak levels presently and they may get even worse. If you lose your home in foreclosures, you will have to go for renting your accommodation and may take years thereafter to buy your own home. A counselor may not be able to reduce the rate of interest on your mortgage, but he can reduce the amount of monthly payment. This will help you with some money for other payments and save you from the danger of foreclosure.
4. The reduction in payments towards late fees and penalties - These fees are sometimes more dangerous than the interest charged to you! And they will take your debts to new heights in no time. They may prove to be the last straw for many overburdened people. Your counselor can speak to your creditors to set up a new plan for payment which will end these fees and eliminate your debt sooner.
With the deduction in the rate of interest and late payment fees, the principle debt may be reduced to 50 per cent or more.
5. Avoiding bankruptcy - Bankruptcy should not be the best solution for you anytime. If you unsecured debts are over $10,000, your counselor can provide you the quickest and most effective methods to pay everything off.
There are many credit counselors available who can provide you professional, confidential and free service. They will work with you one-on-one to get better understanding of your problems and provide you options.
Don't fight the battle with your debts alone. Avail the services of counselor and discover smart goals to manage your debt and repair your credit.
Author : Chintamani Abhyankar
About the Author :
Carrying a 'loaded' credit card is everybody's dream. But with limitless shopping, it will soon be overloaded with debt! It is an embarrassing situation and you want to come out of it as quickly as possible. Your counselor can sort it out for you. How to interact with him? How to sort out the problems of debt? Chintamani Abhyankar provides useful tips and advice.
Chintamani Abhyankar, is an expert in the field of finance and taxation for last 25 years. He has written many books explaining inside secrets of the magic world of finance. His famous eBook Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and tips on personal finance.
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