The Advantages and Disadvantages of Debt Counselling

Considering debt counselling? Well, when you think about the entire concept of debt in general, you probably heard the word debt first and shut down. Thing is, no one wants to talk about it, but talking about it could very well be the best thing you can do for yourself.

The counselling part is the good part. Perhaps it’s not the fun part, but there are many ways to look at it and we tend to choose a positive one.

Counselling is generally described as getting advice from a professional in a relevant field to what you’re being reviewed for.

There are many advantages and disadvantages to debt counselling and while it’s a common concept for most, we make a point of it to enlighten you either way.

Debt counselling – Advantages

  • Debt counselling helps you protect your assets and personal belongings

Think your car for example… You would not want that to be repossessed, which is often the first asset, apart from investments, that gets chosen to pay back your debt. When receiving debt counselling, you are protected at any type of repossession at all times.

  • You won’t receive any calls or threats

Making debt is a serious commitment. One such that is not emphasized enough and often overlooked. Making debt means that you owe people or company’s/institutions money and they will keep calling you until the day you pay your accounts unless you’re receiving debt counselling.

Debt counsellors are advisors are paid to deal with creditors for you and will even be able to discuss lower interest rates, as well as a suitable payment plan on your behalf, without you having to deal with it.

  • Debt counsellors will consolidate your debt and reduce your monthly instalments

This is the entire idea of getting a debt counsellor, to make the entire process easier for you, while adhering to legal procedures. Instead of paying several accounts, counsellors will negotiate payment for you and then covert all those singular payments into one amount that you pay back at the end of each month.

  • You won’t be able to apply for new credit when under debt review

While this might sound terrible to you, it’s the best thing for you. The last thing you want to do when struggling to pay your debt back creates more debt. When being placed under debt review, you won’t be able to get into more debt.

The disadvantages of debt counselling

  • There is a possibility of you not qualifying for debt counselling

Once you complete an assessment, which includes your income and expenses, a counsellor will be able to determine whether you qualify to receive debt counselling, or not.

  • You have to pay for debt counselling

This is something that probably doesn’t make any sense at all since you’re trying to get out of paying for anything more than you should, but according to law, debt counsellor has to be paid in full, before proceeding with your debt review.

  • Many debt counsellors are not legit

Be sure to check your debt counsellor of choice’s registration number. There are many debt counsellors that claim to be registered but are not. The best way to find a proper one is to get a professional referral to one.