Managing your personal finances can be very difficult, especially if you start to fall behind on some of your bills. You may start to feel overwhelmed and not sure how to best handle your finances. It can be hard at times like this to know where to turn for help to get your finances back on track. There are several places you can go for professional help and for help understanding your options and how to best get a handle on your outstanding debt.
The first step would be to seek out financial counselling from a company that specialises in debt management. When scheduling an appointment to meet with a counsellor, be sure to have all of your bills readily available. Your counsellor will need to have a complete grasp of all your outstanding bills to know how to best help you create a repayment plan. The credit counselling agency will likely contact all of your creditors and try to make arrangements with them to lower the amount of you owe each month. In some cases, the counsellor may even be able to lower the total amount you owe if your credit agrees to settle for a lower payment amount.
Financial Counselling Australia is a free service to assist Australians with financial difficulties.
Debt Management Plan
The credit counselling agency will work with you to set up a debt management plan. This plan will offer a comprehensive plan to pay off all of your debt over the course of several months or even several years. Once this plan is in place, you will make one monthly payment to the debt management agency, and then the agency will disperse your funds according to the agreement set up with each creditor. While it may take you several years to pay back all of your debt, depending on how much you owe and how much you can afford to pay each month, it is an effective way of reducing your debt. In addition, the creditors will stop calling your home and a note that a payment arrangement has been made will be added to your credit report.
Tips for Finding the Right Company
While there are many debt management agencies available, it may be difficult to determine which one to use. The first thing you want to look out for is any agency that promises an instant and quick fix to your debt problem or claims that it will have debts removed from your credit report. This are sure signs that the company may not be legitimate because debts cannot be removed from your credit report and no matter what the agency does you still owe the debt.
When looking for the right agency, be sure to ask each agency a few specific questions. You want to ask them about any fees for the services right away. Many companies charge between $25 and $50 to create a debt management plan. Even some of those that offer free counselling services, they still may charge a small fee to create a plan. While some types of fees may be unavoidable, you want to make sure you are not surprised later by additional fees – so ask and get it in writing.
You also want to make sure the agency is licenced in Australia and has the authority to offer you financial services. You can check with the Australian Securities and Investment Commission to check if an agency has the required Australian Financial Services (AFS) licence. If the agency does not have this licence it might be smart to avoid them.
Take you time to find a debt management company that will provide the services you need. Just because you meet with the agency does not mean you have to stay with them. If you feel that they cannot provide the services you need, then switch to a new company. This is too important to your financial future to settle for a company that cannot guarantee you the services you need.
*Always make sure you understand everything that is provided to you and that you are 100% comfortable with it.
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