The financial stories remain similar over
the months and the years. With debts becoming a nuisance, people make
resolutions and resolve to stand by these resolutions. But, once on a
spending spree, little do they care for the resolutions that they made with
so much efforts. Debts once again begin their run. And so do the
How many months do you intend to continue this way? With the mounting debts,
repayment becomes difficult. Bankruptcy suits are filed against the debtor
and he loses his belongings to the creditors. If this is not what you plan
to mirror in your life, then debt counselling will be strictly recommended.
Debt counselling is a help in the settlement of debts from a friend,
relative, or an outside agency. Through debt counselling, individuals are
educated about the disadvantages of debts, means to lessen the occurrence of
debts, and methods of settlement of debts already incurred.
The underlying assumption in debt counselling is that if an individual wants
he can surely improve his debt status. The contention of most people is that
they do not know how they contract debts at the very first instance.
Nevertheless, there is little to this argument other than an excuse. A
proper management of the income can surely lead people out of debts.
Debt counselling requires the debtor and the counsellor to sit together for
a counselling session. All matters related to the debts and the other
aspects of the finances like the income that one receives, the expenditures-
expected and unexpected, those requiring to be satisfied with priority,
standard of living, etc. are discussed during the counselling session.
The counselling session may be undertaken in about two to three sessions.
This is however dependant on the individual case factors and the counsellor
chosen. Borrowers must be frank while describing their case to the
counsellors because subjective elements are important in forming a
There are basically five functions of debt counselling. In the following
section we describe the functions in detail.
• One-to-one counselling
Borrowers get resources on debt management from books, self-help guides, and
seminars and conferences. However, these prove of little help. With the
methods described having a more generalised feel, borrowers are unable to
use them to their specific case. One to one counselling sessions are
arranged with experts acting as counsellors. Most of the raw material in
their forming a conclusion for the case comes from the individual’s account
of his financial condition.
• Self-help packs
As discussed earlier, borrowers cannot completely free themselves of their
responsibilities towards the debts. Nor can they resort to outside help
every time when a debt comes up for repayment. The borrower will have to
take certain steps on his own. A judicious use of income is always
preferred. While spending, the necessities must always come first. Try as
much as possible to curb the unnecessary expenses. No debts must be ever
ignored. If debts do occur, then steps to fix them must start from the
beginning. Such tips will be advanced to debtors under the self-help packs.
• Debt repayment plans
Debt counselling also offers to help with the debts already incurred. Debt
counselling agencies study the case of the individual and suggest debt
repayment method out of the various debt repayment methods available.
Borrowers are made aware of the advantages and disadvantages of each method.
A genuine debt counselling agency will make a suggestion and not an offer.
Many lenders try to sell off their debt repayment products in the garb of
offering debt counselling. Borrowers must be able to distinguish between the
genuine and the fake debt counsellors. Though the scope has widened because
of the internet making more and more lenders available, it will be unwise to
associate with any lender without making the necessary enquiries about their
trustworthiness and reliability.
• Negotiations with creditors
Making the payments to the various creditors can be a gruelling task. With
creditors not lessening their demands, the debtor is in a fix as to how he
is going to repay to the other creditors. Proper negotiation will be
required to compel the creditors to lessen their demands. Debt consolidation
agencies represent the debtors during the debt settlement process. Lump-sum
payment on the debtors account acts as an inducement in the negotiation
process. The amount remaining after the debts have been repaid can be used
by the debtor in the manner he desires.
• Continuous help and advice
Debtors are not left to fend for themselves after the counselling ends. It
is normally seen that people face difficulties in implementing the advice
gained in the debt counselling session to the real life. Counsellors conduct
a study of the factors that might be preventing the implementation. New
suggestions or modifications to the old suggestions are made according to
the demands of the case.
Some people would laugh at the suggestion of taking debt counselling as
being hyper-sensitive to a triviality like debt. But debts are not
trivialities. They can attain dangerous proportions if they grow unhindered.
Though individual attempts of the debtors will be always welcome, these can
go haywire in the absence of expert help from counsellors. With experts
filling up for counsellors, debtors can rest assured that they will be fully
rid of the debts.
About the Author: Aditya has completed his masters in mass
communications from Jamia University. If you need UK secured loans,
unsecured Loans, mortgages visit