When seeking debt relief, not all options are the same. There are many choices when it comes to finding a way out from under a debt burden, but some may be more beneficial than others.
One of the least intrusive debt relief options is to seek help from a credit counselor. Credit counseling agencies offer a wide variety of services, some at no cost to you. Find out how a credit counselor can help you get out of debt, before filing for bankruptcy or negotiating with a creditor by asking these questions.
What service is best for me?
Since credit counselor offer a variety of services, it is important to find out which service is the most beneficial for your unique financial situation. In many cases, a debtor education course can provide you with enough information to develop your own debt relief plan without the help of a third party. This course teaches you how to create a budget, manage your money and use credit wisely. For other people, a debt management plan may be the best option, whereby the credit counselor helps you develop a debt repayment plan and negotiate the plan with your creditor.
How will my financial situation change as a result of the service?
It is important to find out how each of the services offered by the credit counseling agency could affect your financial future. For example, If you choose a debt management plan, your credit may be damaged more so than if you pursue a direct debt repayment option with your creditor. Ask the credit counselor to walk you through the potential outcomes of the service you choose and how it will affect your (a) amount of debt (b) current credit standing and (c) ability to obtain credit in the future.
Are there any additional costs associated with the service?
Some of the services offered by the credit counseling agencies are free, while others may require a small fee. It is important to ask how much you will be required to pay for the services, if any, and whether the services will affect your future finances. For example, some debt settlement options may result in additional tax liabilities. Be sure to find out how you will need to claim your debt settlement agreement on your tax return.