When debt counselling can work and when something more dramatic is required

Debt counselling is often the last stop before filing for bankruptcy. Bankruptcy is a major step to take and it can have serious consequences on your credit report for up to seven years.

Bankruptcy can be avoided even in the most desperate of financial situations. Debt counsellors can often negotiate down your debt so you are able to clear your debts by paying only a portion of the actual owed amount.

Debt counselling only works if the other parties (the people you owe money to), are willing to negotiate your debt. In the main, many  lenders are willing to take a small, guaranteed lump sum payment over a fragmented payment over many years that may cost more money to retrieve.

Here is the process that debt counsellors put into place. They will get you to budget so you can take control of your debt. They look at your specific liabilities, your income, any assets you may have and draw up a proposed strategy that you have to follow for you to repay your creditors and get yourself out of debt. They realise that it is easy for a consumer to get themselves into a vulnerable financial position, Getting out of debt is a more difficult task and can you may require some one to assist you.

Debt counselling also attempts to educate people about the mistakes they may have made to get into their current financial position. They explain the principles behind money lending, credit and getting into debt. These principles seem basic when they are outlined in a list but often people need to be reminded as many forget the principles. Debt counsellors are usually more knowledgeable in finance and debt than most consumers so if you are being swamped by debt, debt counselling could be a viable option for you to explore.
It can be very useful to speak to a debt counsellor to discover your exact options pertaining to your particular financial situation. They may be able to identify a strategy that will help you out of debt without needing to resort to bankruptcy.

Fox Symes is the largest provider of debt solutions to individuals and businesses in Australia. Fox Symes helps over 100,000 Australians each year resolve their debt and take financial control.

If you are in debt and want to know more about debt counselling, contact us on 1300 361 204 or fill out the short contact form.

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