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Do You Need Some Credit Counselling Tips?

Anyone who's capable of earning wages, salaries or commissions, can make use of this plan. It should in no way be thought of as bankruptcy. This is simply a court supervised method for a borrower to pay off his debts. The borrower simply draws up a plan to pay off his debts over a three-year period. If the court accepts the plan, the lenders are almost obligated to accept it. While more recent bankruptcy laws still leave room for abuse by dishonest "big business," they fortunately have improved the outlook for the "little guy."

Your job as a Credit and Debt Counselor is to meet with the overextended borrower, listen to his problems, and help him to plan a budget to live by, and set up a plan for the proper management of his income that will include money for him to live on, plus regular payments to his creditors. In the beginning, you can meet in the borrower's home, pretty much the same way an insurance agent does. Later on, you'll probably want your own office, but a formal office for your business will never be absolutely necessary.

Many people are reluctant to be seen walking into a Credit Counsellor's office. Again, there's a personal embarrassment - the thought of their friends seeing them, and the worry of what other people will think of them. So if you do opt for an office, make it as unobtrusive and as confidential as possible. A sign stating "Money Management Consultant" would be appropriate. Gaining the confidence and trust of your clients will be the secret of your success. And do not underestimate the power of "word-of-mouth" recommendations by grateful clients.

Follow the methods of the insurance salesman, making everything as comfortable as possible for your clients. So long as you listen to your client's problems, and then work with him to plan a budget he can live with while paying off his bills, you won't be required to have a license in most states. You simply listen, assist the borrower in planning a budget, and he administers it himself. He makes all the contacts with his creditors, and makes all the payments directly to them. To give you the money and have you disburse it among his creditors would require a license for your business.

In your service you have to find out the total amount of cash your client has coming in each month, and on what dates. Calculate according to his current obligations, how much he needs for living expenses: Rent or mortgage payment, utilities, food and clothing. The remainder of his available income is then budgeted for division among his creditors.

One of the best (and easiest) methods of money management within a budget is via envelopes. The wage earner marks a different envelope for each of his obligations. He then makes predetermined amount of deposit in each of these envelopes each payday.

Thus, if his mortgage was $500 per month, and he brought home $750 each pay day, you'd probably advise that he "deposit" $250 each payday into the mortgage envelope. And so it would be with each payment envelope. Many people find this kind of system scary in the beginning, but after they've used it for a month, they swear by it as the only way to keep bills up to date.

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