by: Michael Saunders

What exactly do credit counseling agencies do? To put it simply, a credit counseling agency analyzes your sources of income and your expenses. The agency will:

A) Detail what you owe.

B) Give you an organized picture of your financial situation.

C) Provide options that match your resources, lifestyle, and goals.

D) Tell you the steps you need to take to reach those goals.

Whether you first contact a credit-counseling agency by phone, e-mail, or in person, the counselor will ask you why you're there, what you'd like to accomplish at the meeting, and what your short-term and long-term goals are.

Then some fairly detailed data-gathering will take place. You'll be asked about your income sources and tax deductions, as well as your monthly expenses. Having a good idea about what your monthly expenses are is very helpful, but it isn't a requirement - if you don't know, the credit counselor can help you estimate them. A quick subtraction of expenses from income will tell you how much you have available for monthly debt service, if any. The counselor will suggest ways to adjust your expenses or income, to get you to a positive cash-flow position (in which more money is coming into your household than is going out).  (continued...)
Are there Benefits Of Working With A Credit Counseling Agency? (Part 1)
  Page 2