Credit Counseling’s purpose is to help people better manage their finances. Most people have problems with debt because they are not aware of how to manage it. They don’t know how to save money and pay their bills, and this makes them vulnerable to bankruptcy. A credit counselor can help them to create a budget and better manage their finances. He can also offer financial advice regarding tax debt and home equity loans. A counselor can give you the tools to build a plan that fits your lifestyle and your budget.
Often, people go to credit counseling because they are worried that they might file for bankruptcy. This does not have to be the case. In fact, bankruptcy remains on a person’s credit report for 10 years and is recorded in the public court for 20 years. During this time, credit counselors can help them develop the skills and knowledge they need to manage their finances better. If you have decided to file for bankruptcy, you should allow yourself a 3- to five-year window to make sure that you can afford to pay off your debts.
Before meeting with a credit counselor, gather your financial information. Bring all of your bank statements and paychecks. It’s important to have all of these to hand to your credit counselor. In addition, you should have a list of all your debts, monthly payments, and interest rates, as this can help them better understand your financial situation. A list of all your credit card balances, interest rates, due dates, and payment dates should be prepared.