The Federal Trade Commission (FTC) says you have many options if you sink too deeply into debt. Many of these actions may be undertaken on your own. For example, the FTC says you can call your creditors to see if they are willing to modify your account terms. You can also create a budget aimed at paying off your debts in a certain time frame. Many people have trouble doing these things on their own. Instead, they turn to a credit counseling company to help them get out of debt.
Step 1
Find a reputable credit counseling company. The FTC recommends to choose a firm that answers all your questions and clearly discloses its services and fees before you enter into an agreement. Ask whether the company and its counselors are certified by a professional organization and if it is a not-for-profit firm. Make sure employees are not paid by commission based on the services you use.
Step 2
Make your initial appointment with the credit counseling company. Most firms will make an in-person appointment at a local office, but some provide services via phone or email. Use the option that is most convenient for you.
Step 3
Gather all the information you will need for your appointment. The Money Management International website says you will need a list of all income sources and expenses and copies of your latest billing statements. Put together some financial goals to use as a basis for creating a debt management plan with the counselor.
Step 4
Speak honestly with the counselor during your appointment. It may be embarrassing to discuss your personal financial problems, but the counselor cannot develop a realistic plan unless she knows the whole situation. Answer her questions and add any relevant information.
Step 5
Follow the debt management plan you develop with your credit counselor. He will talk to your creditors and set up a payment schedule that fits your budget. The FTC says a typical debt management plan will take 48 months or more to complete, but you will be debt-free at the end if you follow it.
Tips and Warnings
- The best credit counseling companies offer a wide array of consumer education materials. Take advantage of this service if it is offered by your company. The more you know about personal finances, the better you will be able to manage your money and stay out of debt once you have paid off your bills.
- You will not be allowed to open any new credit accounts or take out any loans while you are working through your debt management plan. Be sure you have the discipline to follow a strict budget and live without new credit before you go through credit counseling.
Things You'll Need
- Copies of bill statements
- List of income and expenses
- List of financial goals
Member Comments