As the US edges to record unemployment, debt is becoming a more serious reality. Debt has long been a problem in the US. But now, we are facing a new reality. While counseling is typically something that costs quite a bit, it can be free. So, to help you get through these rough times, let’s look at your free debt counseling options.
Free Debt Counseling At A Distance
You don’t need to travel far to get free debt counseling. You just need to be able to make it to your phone or computer.
Many non-profit organizations specialize in helping people escape debt. There are also free consultations available from most professionals who offer debt counseling. But for a fully free debt counseling option, non-profits are the way to go.
Free Debt Counseling
You can find free debt counseling from several online sources. Your free options are typically non-profits that can be reached by phone.
Once you call a debt counseling service, you will start with a phone consultation. During this time, you’ll explain your financial challenges to a debt counseling specialist. They will use the information you give them to suggest ideas to you.
Even paid debt counseling agencies usually offer free educational material. But a free debt counseling non-profit will certainly suggest you read some free resources. These materials will be relevant to the specific issue you’re struggling with.
Personalized Financial Plans
Your consultant will come up with an appropriate course of action. This plan of action can involve one of several programs or a simple series of steps.
Usually, you will receive a simple set of steps based on your situation and your current goals. If that alone won’t suffice, they will move on to your other options.
Debt Management Programs
Debt management programs are comprehensive programs designed to help you rein in your debt. It may involve:
- Consolidating your debts
- One monthly payment until you’re debt-free
- Negotiations between your consultant and creditors for lower interest rates
- Where possible, debt forgiveness
- A personal financial action plan
You will still have to make monthly payments while your plan is active. But a debt management plan should reduce the overall cost of your debt repayments. At the very least, it will simplify the repayment process. Just keep in mind that the debt management plan may collapse if you miss even one payment.
When there are no other options left, your counselor may suggest declaring bankruptcy.
The personal bankruptcy process should take about 4 months to complete. Your debts will be erased, but you will lose all your credit. The move will also destroy your credit score for a while and remain on your credit reports for a decade. So, bankruptcy will only be considered as a last-chance option.
Can I Trust Free Debt Counseling Services?
Just because it’s free doesn’t mean it’s low quality.
Debt counselors are trained professionals. They can help you come up with the right plan for your financial situation. But as always, you should do your background research into any service you plan on using.
The Better Business Bureau suggests that you use a non-profit debt counseling or consolidation service. These organizations are often more dedicated to your financial well-being than for-profit businesses.
When you’re looking for free debt consultation, there should be no fees. So, watch out for expenses like advance fees. Apart from that, be sure to watch out for vague promises and claims about the services they offer you.
There are other free options that you may be conditionally eligible for. Military veterans may be eligible for more advanced services through certain non-profits.
It’s key to look into what counselors can offer you. So, be sure to ask them about other services like:
- Credit report reviews
- Homeowner counseling for mortgage debt
- Foreclosure prevention