What is Debt Counseling?
One of the first steps for anyone who is thinking about debt consolidation is working through the process of debt counseling. For people who aren’t familiar with this process, however, this term can sound rather daunting. In fact, debt counseling is a fairly painless process, and most people who go through are glad that they did it.
Debt counseling is done with a trained financial professional. Generally, these people have years of experience working with clients from a wide variety of financial backgrounds. In some cases they have experience with other types of financial counseling such as retirement planning, but their main focus is debt and credit counseling. They have a professional obligation to keep the information that they discuss with their clients confidential to only the people who need to know.
What to know about Debt Counseling
A debt counseling session starts with a review of the income, debts, and other bills that the client is obligated to pay. The debt counselor is able to work through the documents provided by the client and put together a budget that includes enough money to pay the bills and put something towards debt repayment. The counselor is also able to look at the client’s overall financial picture and gain an idea of the right financial products for him or her.
Financial counseling is a process that anyone can got through. Income, debt level, occupation, and even financial history including bankruptcy do not prevent anyone from going through this process or qualifying for a debt consolidation loan. It’s possible for a individual to complete it or a couple to go through the process together.
Depending on a person’s individual circumstances, it might take one or several sessions in order to complete the counseling process. People with simple financial history tend to go through faster than those with many debts and complicated situations, but this isn’t true in every case. A good debt counselor will answer all of their client’s questions, so it is common for people with limited financial experience to spend longer with a counselor than those who are more familiar with the concepts and overall process.
Counseling can be done over the phone, over the internet, and in person. All three methods have advantages and disadvantages. If you are thinking of starting the process make sure that your counselor is someone you feel comfortable sharing your financial history with.