When it seems you just cannot stay on top of your bills, you might fear the next step is the repossession of your assets. Some may turn to New Jersey credit counseling as the answer to their mounting debt. Credit counseling can be helpful, and while it does not guarantee the salvation of your car, home, etc, it can still open doors that may lead you back to financial solvency.
As U.S. News and World Report explains, initially your credit counselor will likely conduct a review of your present income and your current rate of expenses. This is to establish a profile composed of your assets, debts and your present budget. From there, your counselor will look for ways you can improve your financial standing, such as cutting expenses or promoting better savings.
Not everyone can improve their standing with creditors through reconfiguring their personal finances. In some cases your income simply cannot meet your monthly obligations. You might try to talk to the creditors yourself to work out an arrangement, but credit counselors generally understand the concerns of creditors much better and are more likely to work things out.
In the event you cannot repay your outstanding debts yourself, your credit counselor might steer you toward a debt management plan. After your income, debts and current assets have been evaluated, your counselor will compose a DMP that determines how much money you will have access to each month. This will be your baseline to start to climb your way out of debt.
Building a strong DMP baseline may entail cutting down as many regular expenses as you can. You might have to give up cable or streaming services, forgo eating out at restaurants, or shop at less expensive stores. Showing that you are serious about cutting back on your lifestyle and diverting money towards your debts can impress your creditors, who need to accept your DMP. If they do, you would then pay your credit agency every month, and the agency would pay your unsecured debts.
Some people may not be able to secure a DMP or their debt may be too great for creditors to accept a DMP. In those cases, a counselor may recommend filing for bankruptcy protection. While many people fear the stigma of going bankrupt, with a counselor you have someone you can at least speak to about your concerns right off the bat.
While credit counseling does not guarantee that you can save personal assets from repossession, it does offer a number of options that can help you out. Since debt forfeiture is varied from person to person, do not consider this article as legal advice. It is only meant for educational benefit.
