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If you are having trouble paying down your credit cards or loans on your own, you may decide to make an appointment with a Houston credit counseling service. A credit counselor will look at the amount of money you make and the amount of debt you have and come up with a plan to help get your financial life in order. Sometimes the plan dictates how much you should pay each month to each creditor, whereas other times the plan involves more drastic measures, such as debt consolidation or even bankruptcy. If you are meeting with a credit counselor for the first time, you may be nervous simply because you don't know what to expect. Here is what you can expect during your first Houston credit counseling appointment. A Review of Your Outstanding Debt: After you meet the credit counselor, he will get right to work helping you. When you set up the appointment, the Houston credit counseling service will ask you to gather up all of your current credit card or loan statements. This is because the current statements are more accurate than pulling your credit report, which can be months behind. The counselor will then make a chart of all of your outstanding debt, showing how much you owe in total, what your minimum payments are and what the interest rate is. A Review of Your Current Income and Living Expenses: The next thing that will happen is that the credit counselor will review how much you make and where your money is going. They will likely ask you to bring in your bank statements for the past three to six months so they can accurately see where your money is going and what it is being spent on. Coming Up With a Plan of Action: Once the Houston credit counseling service has evaluated how much debt you have and how much money you make and have leftover at the end of the month, they will put together a plan of action for you. This plan will detail exactly how they hope to get you out of debt. If you have the extra money, or can cut discretionary spending and use that money to pay down your debt, they will put together a plan as to which credit cards you should pay down first. Typically, you want to pay the higher interest cards first. However, if your income is too low, you may not be able to pay off the full amount of debt you owe at the current interest rates. In these cases, debt consolidation or consumer settlements may be a better option for you. Consolidation typically reduces your interest rate, allowing you to pay more toward principal, while a consumer settlement may help to reduce some of the principal you owe. If you are so far in debt that other options still won't help you get out of debt, bankruptcy may be your only option. Implementing the Plan: By the time you leave, there will be some sort of plan of action in place. However, it will take a few weeks to fully implement it. The credit counselor may have to call your lenders and ask them to give you a settlement amount or call credit card companies and ask them to reduce your interest rates. It is important to understand that the plan is a rough draft, so to speak. A creditor may be unwilling to settle or you may not get approved for a debt consolidation program. As such, most counselors will remind you as you are leaving that this is just a rough draft and that they will meet with you to finalize the details after they are able to speak with your creditors and make arrangements.
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