After you have considered various debt relief options, you will have to make a final decision as to which one is best for your needs. It’s a decision that requires you to take a variety of factors into account. Every situation is different, and the debt solution that is perfect for one individual may not be right for another. Debt consolidation loans, for example, might be great for those who do not really need or want debt principal reduction, but it will not be suitable for those who must see their principal reduced if they are ever to get current on their debt again.
If you’re thinking about enrolling in a consumer credit counselling program, it’s important that you only sign up with a credit counselling agency if doing so makes the most sense for your situation. Read on to decide if credit counselling is right for you and your needs.
Your Financial Situation
Consumer credit counselling only makes sense if your debt will be manageable with some minor tweaks to your interest rate and debt terms. Practically speaking, that means that credit counselling is not really a viable option if you have more than $10,000 in consumer debt. Once your debt total reaches that level or higher, the benefits of programs such as debt settlement really begin to outweigh any of the temporarily negative effects that they may have on your credit.
On the other hand, if your consumer debt is no more than $10,000, consumer credit counselling will likely be able to help you pay off your creditors and solve your borrowing problems before they get out of hand and force you to file a consumer proposal, or, even worse, bankruptcy. Your counsellor will work to lower your average interest rate, which will reduce your monthly required payments and put you on the road to debt freedom.
Your natural temperament is also a major factor in deciding between credit counselling and another debt relief program such as debt settlement. If you tend to be patient by nature, credit counselling is an excellent choice because it is not always the quickest way to get out of debt. It can take many years to pay off your debt under a good credit counselling plan, so if you don’t mind waiting, credit counselling can be the right solution for you.
On the other hand a debt settlement program is likely better for you if you are done being patient with owing so much money and want to be rid of your debt in about 12-36 months. In fact, a debt settlement company can often get your debt reduced to the point where you will be debt free after twelve months. Depending on how much you owe, it may be possible for credit counselling to get you out of debt in a similar time frame, but you will likely pay more money because you do not get a principal reduction. However, that does not mean you should necessarily write off credit counselling, especially if you are serious about education that will put you on a firmer financial footing going forward.
Be Sure about the Best Debt Solution for Your Needs
It is important that you evaluate your circumstances and whether consumer credit counselling really is the best solution to your debt problem. Fill out the Canadian debt relief form to learn more about your options and to find out which debt solution is truly right for you.