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Who Can Apply for Debt Counseling?

June 14, 2012 | Comments: 0 | Views: 98

The weak economy of the world today has left many people in debt. If people were able to manage their finances before, the opposite is true now because of the high cost of living and the lessening of the income they receive every month. The good thing is they can now apply for debt counseling.

Debt counseling is an act of helping a person to eliminate his debts and protecting him from hostile creditors who may file a legal complaint against him. These creditors are those who are not sensitive to a person's situation and problem. Through debt counseling, both the creditor and the person in debt would benefit.

The consumer or the person in debt would be able to conveniently pay lesser monthly payments while the creditor would receive payments and would no longer spend for fees needed for legal action.

The counseling process can be a bit lengthy in solving a person's debt problem. Application for this process can take as long as two months. In those couple of months, the consumer is protected inside five working days. In the application period, the debt counselor along with the creditor in behalf of the consumer will do negotiation.

Usually, the creditor would like to deal with the debt counselor instead of the consumer. The negotiation clearly signifies that the consumer is really drowning in debt and does not have the means to pay the necessary payments every month. It also shows that the consumer is willing to settle his debts and is taking action to pay back the creditor. The creditor is also assured that the debt counselor is there to mediate and assist the consumer cope with his debts.

It is easy to qualify for debt counselling. A criterion is set and the first on the list is that the consumer must have monthly income. He must be employed or is self-employed. The salary he receives must be enough to pay for his basic needs and his monthly debts. After setting aside money from his salary for food, transportation and other household and family necessities, he must have money left to give to his creditors.

It is best to undergo a debt management plan given by a debt counseling company in order to avoid bankruptcy. When one files for bankruptcy, this can damage his credit for a decade. In addition, debt counsellors can help waive late charges, lower interest rates and even lessen the balance of a debtor.

The company can also convince creditors to work out a repayment schedule for their debtor. Debt counsellors can also give recommendation regarding the best path to take and these include debt settlement or debt management program.

When one spends most of his time worrying about his debt, he would not have a good quality of life. Instead of enjoying life, he would spend it worrying about money. This will then give him with so much stress and strain in his life, relationship and office. Instead of wasting his time with anxiety, he should apply for debt counseling to help him with his financial worries.

Cecelia Owens writes articles for the debt counselling website,, and loves to share her knowledge about debt and personal savings.

Source: EzineArticles
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