Credit Counseling Can Make a Difference

Are you one of over million people seeking credit counseling because you have too much debt? With the weight of debt on their shoulders many Americans are also filing for bankruptcy. But if you decide to walk away from your debt, news laws require you to sit down with a credit counselor to discuss your situation.

However, the idea of credit counseling favors the credit card companies and lenders of varying degrees. They hope after you have a thorough look over by the credit counselor you would change your mind about bankruptcy. After all, once you go into bankruptcy you have the chance to get rid of all the red ink on your credit card statement. You can also skip many other payments that have become a drag on your peace of mind since you stopped making them. So the creditors lobbied to make counseling a part of the process because that is the only way they stand to get back some of their money.

But that's the American way and is opposite to how our neighbors to the north treat delinquent debtors who seek credit counseling. Credit, like any other thing is a learned behavior. You get the habit when you are offered and accept credit cards from a host of credit card companies. Then you start off with a small credit limit and it gradually increases as your desire for material goods heads toward the sky. All this time you are learning how to spend money you don't have because you can put it on your credit card and just pay a small minimum balance when the statement comes in the mail.

What you overlook is you are paying excessive interest rates on the balance each month. Eventually, the ceiling will fall in and you will have to seek a safe place. Once you get to the point of credit counseling your habit is well entrenched, and the counselor advice to stop spending is ignored because you can't. You want to, but you don't have the willpower. You then take the easy way out and seek bankruptcy protection.

However, if you had the proper motivation, you could commit yourself to a debt rehabilitation center and slowly reduce your addiction to spending what you don't have. This is the method used by alcoholics who want to become dry. Smokers also go this route with great success. Even people who want to lose weight work on their behavior and reduce their food intake to achieve a slim body. So if we follow the Canadian model for credit counseling, we would work on our behavior to avoid future problems with credit.

But if you decide that you will like to pay off your debts rather than go bankrupt, a credit counselor can help you put a plan together. Your plan will stop those nasty collectors from calling even though they know you can't pay. The plan will also give you some breathing room, and allow your creative juices to flow. With your new creativity you can come up with ways to earn extra income. Once you start paying off your bills you will come to appreciate the benefit of credit counseling.

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