Regaining Control With Credit Counseling

Many people find themselves in situations of not being able to pay their bills on time. After they pay their mortgage or rent, buy groceries, and pay for other essential expenses, they might not have enough money left over to pay for credit card bills, medical obligations, and other expenses that fall outside of their regular monthly budgets. Rather than risk having their wages garnished and bank accounts frozen, people might be advised to go through credit counseling. This service may help clients gain control of their money and rebuild their financial stability.

These services are often provided by qualified counselors who know the laws regarding debts and collections. They can guide people in restructuring their debts and paying them off in a timely manner. They also might be able to advise clients about what debts are not eligible for restructuring and what steps creditors can take to recoup their money.

After learning about their rights and obligations, people may then be asked to provide proof of what they owe and to what companies they are in default. Counselors often restructure clients' debts in order from least to greatest amounts owed. After they organize these amounts, counseling professionals can then help clients decide on an amount that they can pay each month toward each bill.

Many people pay one amount to the service, and that amount is then divided among the creditors. A counselor may apply more payments toward smaller obligations first and then pay smaller amounts on the other bills. As each smaller bill is paid off, more payments are then applied to the other obligations. In a matter of weeks, clients may witness some of their obligations being satisfied completely.

When the accounts are satisfied in full, professionals might advise individuals to close out the lines of credit completely. This action helps people avoid going back into debt and having to start the repayment process all over again. To boost their scores, however, individuals may be advised to keep open one or two accounts that are deemed to be essential. This could include car loans or mortgages.

As people go through this process, creditors might be prevented from collecting on accounts. They may be prevented by law from garnishing people's wages or putting liens on bank accounts. If debtors default on the repayment process, debtors may resume their collection efforts.

When going through Toronto credit counselling, debtors can regain financial stability. They work with qualified counselors. Creditors typically cannot collect through garnishments or liens.