When Is Credit Counseling Necessary?
Who needs credit counseling? The need for these services can be a tough thing to admit, but it is not synonymous with financial failure. In fact, those who seek credit counseling services are actually demonstrating great strength. It takes strength to face the situation, it takes resolve to change it, and accepting help is a sign of maturity.
There are, however, many debt counseling services that are not reputable. In the coming days, we will discuss the pros and cons of the $7 billion industry, as well as red flags that indicate a debt counseling service might be a scam.
Legitimate credit counseling services do serve a real purpose. They can help out consumers who fall behind on their payments due to a job loss. Other reasons consumers might consider full-scale credit counseling include escalating debt due to medical problems or irresponsible spending. The minimum payments may have escalated out of control or your payments on debt or other bills may have been late repeatedly. Calls from creditors may be haunting you day and night, and your efforts to resolve the situation may have failed. Credit counseling may be able to help your situation, but according to MSN Money’s Liz Pulliam Weston, bankruptcy is sometimes the better option.
“Be warned: If you’re too far in debt, credit counseling may not be able to help. There are limits to how little your creditors will accept, and a credit counseling service may not be able to cut your payments enough to either give you breathing room or get you out of debt. If that’s true, bankruptcy may be the best of bad options.”
