|
Debt Counselling – Healing Touch For The Ailing Finances
By: Aditya Thakur
The financial stories remain similar over the months and the years. With debts
becoming a nuisance, people make resolutions and resolve to stand by these
resolutions. But, once on a spending spree, little do they care for the
resolutions that they made with so much efforts. Debts once again begin their
run. And so do the resolutions.
How many months do you intend to continue this way? With the mounting debts,
repayment becomes difficult. Bankruptcy suits are filed against the debtor and
he loses his belongings to the creditors. If this is not what you plan to mirror
in your life, then debt counselling will be strictly recommended.
Debt counselling is a help in the settlement of debts from a friend, relative,
or an outside agency. Through debt counselling, individuals are educated about
the disadvantages of debts, means to lessen the occurrence of debts, and methods
of settlement of debts already incurred.
The underlying assumption in debt counselling is that if an individual wants he
can surely improve his debt status. The contention of most people is that they
do not know how they contract debts at the very first instance. Nevertheless,
there is little to this argument other than an excuse. A proper management of
the income can surely lead people out of debts.
Debt counselling requires the debtor and the counsellor to sit together for a
counselling session. All matters related to the debts and the other aspects of
the finances like the income that one receives, the expenditures- expected and
unexpected, those requiring to be satisfied with priority, standard of living,
etc. are discussed during the counselling session.
The counselling session may be undertaken in about two to three sessions. This
is however dependant on the individual case factors and the counsellor chosen.
Borrowers must be frank while describing their case to the counsellors because
subjective elements are important in forming a conclusion.
There are basically five functions of debt counselling. In the following section
we describe the functions in detail.
• One-to-one counselling
Borrowers get resources on debt management from books, self-help guides, and
seminars and conferences. However, these prove of little help. With the methods
described having a more generalised feel, borrowers are unable to use them to
their specific case. One to one counselling sessions are arranged with experts
acting as counsellors. Most of the raw material in their forming a conclusion
for the case comes from the individual’s account of his financial condition.
• Self-help packs
As discussed earlier, borrowers cannot completely free themselves of their
responsibilities towards the debts. Nor can they resort to outside help every
time when a debt comes up for repayment. The borrower will have to take certain
steps on his own. A judicious use of income is always preferred. While spending,
the necessities must always come first. Try as much as possible to curb the
unnecessary expenses. No debts must be ever ignored. If debts do occur, then
steps to fix them must start from the beginning. Such tips will be advanced to
debtors under the self-help packs.
• Debt repayment plans
Debt counselling also offers to help with the debts already incurred. Debt
counselling agencies study the case of the individual and suggest debt repayment
method out of the various debt repayment methods available. Borrowers are made
aware of the advantages and disadvantages of each method. A genuine debt
counselling agency will make a suggestion and not an offer. Many lenders try to
sell off their debt repayment products in the garb of offering debt counselling.
Borrowers must be able to distinguish between the genuine and the fake debt
counsellors. Though the scope has widened because of the internet making more
and more lenders available, it will be unwise to associate with any lender
without making the necessary enquiries about their trustworthiness and
reliability.
• Negotiations with creditors
Making the payments to the various creditors can be a gruelling task. With
creditors not lessening their demands, the debtor is in a fix as to how he is
going to repay to the other creditors. Proper negotiation will be required to
compel the creditors to lessen their demands. Debt consolidation agencies
represent the debtors during the debt settlement process. Lump-sum payment on
the debtors account acts as an inducement in the negotiation process. The amount
remaining after the debts have been repaid can be used by the debtor in the
manner he desires.
• Continuous help and advice
Debtors are not left to fend for themselves after the counselling ends. It is
normally seen that people face difficulties in implementing the advice gained in
the debt counselling session to the real life. Counsellors conduct a study of
the factors that might be preventing the implementation. New suggestions or
modifications to the old suggestions are made according to the demands of the
case.
Some people would laugh at the suggestion of taking debt counselling as being
hyper-sensitive to a triviality like debt. But debts are not trivialities. They
can attain dangerous proportions if they grow unhindered. Though individual
attempts of the debtors will be always welcome, these can go haywire in the
absence of expert help from counsellors. With experts filling up for counsellors,
debtors can rest assured that they will be fully rid of the debts.
About the Author:
Aditya has completed his masters in mass communications from Jamia University.
If you need UK secured loans, unsecured Loans, mortgages visit http://www.ukfinanceworld.co.uk
|
