The amount of debt carried by citizens of the United States has skyrocketed in the past decade, amounting to billions of dollars owed to thousands of creditors. This has become an issue for many households that are now finding themselves paying a large percentage of their household income servicing debt from years prior. If these payments are eating an ever-increasing amount of your income, it may be time for you to obtain the services of a professional credit counselor. Here are some signs that it is time for you to contact a credit counselor.
The Debt Collectors Are Calling
Once you begin missing payments on your credit accounts, the debt collectors will begin calling to see how they can get you to pay what you owe. In many cases, the debt collection company is not the original creditor, but a company that has purchased the debt for a small fee so that they can make a profit when they get you to pay. These debt collectors can be very insistent when they call, leaving the borrower feeling drained, harassed, and hopeless. Talking to a credit counselor can help you figure out the best way to begin paying these debts so you can get the harassing phone calls to stop.
You Have No Disposable Income
If you are living paycheck to paycheck and using credit cards when you need to close the gap between what you make and what you have to pay out in regular expenses, it may be time for you to seek the services of a credit counselor. Having no money to put away for savings can put you in a dire financial position with the slightest financial hiccup. In order to rescue your finances, you have to get yourself back to a place where you are not paying out everything that you earn. A credit counselor can help you create a budget that gets you back on secure financial footing while dedicating a portion of your income to paying down your debts.
It is important to remember that a credit counselor is not a debt settlement company. A credit counselor helps you figure out how to create a better budget and make better lifestyle decisions that will keep you out of debt in the future. They do not negotiate with creditors or tell you that they can settle your debts for pennies on the dollar. While debt settlement companies often charge a significant amount in fees to help you with your financial issues, a credit counselor often has a small fee that is charged per counseling session. Contacting a credit counselor will not affect your credit score.