How Credit Counseling Can Build Your Path to Financial Freedom

How Credit Counseling Can Build Your Path to Financial Freedom

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If you’re feeling overwhelmed by financial commitments and aren’t sure how to formulate a plan to get it under control, credit counseling can be a great way to take back the reins and get on the path to financial freedom. If you’re not sure whether or not a credit counselor can assist you, consider these issues to see if you would benefit from some guidance.

A Full Review of Your Budget and Spending Habits

A credit counselor will take a look at your current budget, income and spending habits to discern whether or not it’s realistic for you to attempt to pay down your debt. If it’s simply not possible, it may be necessary for you to file bankruptcy. If it is feasible for you to pay down your debt, your counselor will look for ways to pare down your budget so that more of your income can be used for debt repayment. He or she may know tips and tricks for lowering your bills altogether, and be able to point you in the direction of additional resources.

If Bankruptcy is Your Best Option

Your credit counselor’s help doesn’t necessarily end if you decide to file bankruptcy. There is still much to learn about budgeting and borrowing carefully in the future. This will allow you to avoid more financial problems during and after your bankruptcy proceedings.

Debt Restructuring and Negotiation

Whether from Abakhan & Associates Inc. or a firm near you, your credit counselor knows the tricks of the trade and can help you negotiate with your debt holders to ease your monthly financial burden. For example, your credit card companies may agree to lower your interest rate or the bank that holds your personal loan may agree to smaller monthly payments over a longer period of time. This will help you save money and give you a bit more breathing room in your budget. Depending on what new agreements are struck, you may be pleasantly surprised by how easy it will be to keep current on your monthly payments and meet your obligations. You may even be able to begin saving small amounts for an emergency fund to avoid piling on future debt.

Additional Financial Education

This aspect of credit counseling is crucial, because this is the stage where you learn how to manage your finances for the rest of your life. Don’t be tempted to gloss over this portion of your counseling. Take notes and save any worksheets or handouts your counselor provides. During this step, you will learn how to make changes to your budget over time, how to deal with any problems that crop up and how to follow your pay-down process until all debt has been eliminated. Your counselor may also go over the basics of borrowing in the future.

 

If you are overwhelmed by your finances and don’t know where to begin, credit counseling can be an excellent option. This process can help you restructure your debt, build a workable budget and make a plan for your future with complete financial freedom.

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Categories: Credit Management

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