Debt Free Zone - Debt Counseling

Debt Counseling

Debt counseling is a pretty interesting place. Are you sure you want to go there? Read more about consumer debt counseling first.

Adventures in Debt Counseling

This is the story of Tim. Tim was a former Eagle scout who lived by the motto "Be Prepared." In most areas of his life, Tim was prepared, too. But when it came to his finances, Tim was not prepared. In fact, he was so unprepared that he was in debt up to his eyeballs! Talk about needing some debt help! His job as a forest ranger provided him with a meager salary, but he had trouble making ends meet after he bought his house. It was no mansion, but it was one of the smarter investment decisions he ever made. Things were fine until he started furnishing the house. He tried to do too much too soon, and the next thing he knew, he had maxed out his MasterCard. Ever the optimist, he thought he could finish what he needed to do (and buy a new grill) by opening a Home Depot card (they offered 90 days same as cash, so why not?). He even got a deal on some furniture that didn't require him to pay for 12 months!

When Tim got his MasterCard bill, he was amazed at how low the required minimum payment was. He could afford it, but after 90 days, he got his Home Depot bill. It, too had a low minimum. But after a few months, Tim noticed he wasn't making a dent in either balance, so instead of paying the required minimum, he paid at least twice that amount. That was working out fine until he got his first bill for his furniture. He could swing that minimum if he cut back on the payments to the other two. When he got his second bill for his furniture, he noticed that the amount was significantly higher than what he paid for the furniture. He made a call to the furniture company and realized that the interest was retroactive, meaning that if he didn't get his furniture paid off in the 12 months before interest was charged, he'd pay interest for those 12 months and until the balance was paid in full.

It was at this point that Tim realized he was getting into trouble and he might need some debt counseling for his furniture and credit card debts. He had heard about it, but wasn't exactly sure what a debt counseling service, so he went to his computer (also bought on credit) and searched for debt counseling online. He learned that debt counseling could teach him a lot about credit and budgeting. He could even learn how to rearrange his finances so he could start a savings account. "A savings account can help me be prepared financially in the future," he thought. He also learned that if he needed help managing all this new debt of his, a debt counseling company could suggest a debt management program, such as debt consolidation. All he would have to do is complete the free, online forms offered by most debt counseling companies. These forms are designed to help debt counseling services specialists assess each individual's financial situation so they can recommend the appropriate debt management program.

Tim's Decision

Tim decided to fill out the forms for several debt counseling companies then reviewed the recommendations he received from them within 24 hours. He took his time reviewing and comparing them so he could be prepared when making his decision about which debt counseling company suited him best. He ultimately chose a free debt counseling company who suggested a debt consolidation program along with debt counseling. He learned a lot--and saved a lot. Now Tim is credit card debt free and enjoying every minute of it.