Debt Counselling

If you are in a flood of debt, turning to debt counseling seems to be the best and only resort to get out of debt. Debt counseling is offered by professionals in debt counseling companies. These professionals help merge all your loans into a single loan. You then have to make only one single payment to the debt counseling company every month. It is the debt counseling company that will later pay your old creditors their monthly payments with the money you send them every month.

The advantage of approaching a debt counseling company is that it is the professionals there that will hold negotiations with your creditors to reduce the rates of interest of your loans. This in turn makes your monthly payment lower than it would have been with individual loans. The more efficient professionals can also reduce the amount of money you had borrowed from your creditors.

Another advantage of using the services of a debt counseling company is that you don't have the hassle of answering your numerous creditors. This is done by the debt counseling company. Moreover, if there are any clarifications to be made with the creditors, there is no need of making multiple phone calls. You just have to make a single call to the debt counseling company.

As debt consolidation is beneficial in many ways, it has its share of drawbacks. The debt consolidation loans are usually for a longer period of time. So you end up having to repay a loan for a longer period of time than it would have been with your previous loans. Moreover, with repayments having to be made over a longer period of time, you often end up paying more than you would have paid through the individual loans.

Debt counseling offers two types of loans; secured and unsecured. The secured loans need an asset to be pledged as collateral. The company has the right to these assets in case you fail to repay your loan. The unsecured loan needs no asset to be pledged as collateral. If you fail to repay your loan, you can negotiate terms of repayment with the company. However, you cannot borrow much money with an unsecured loan, and this loan has a higher rate of interest.

When considering debt counseling, it is important that you choose the right debt counseling company. If you use the help of an unprofessional debt counseling company, there is a possibility of you owing more debt after its services. Sometimes these companies may dupe you into debt counseling when bankruptcy was actually the better option for your financial problems. There are also cases wherein the debt counseling company just takes your money and makes no payment to your creditors.

So choose your company wisely. Check with the local associations of debt counseling companies for the companies that have a better reputation. It is not always that the non-profit company will look for your profits more than a profit debt consolidation company. Do some research on different lenders before making the final decision. Find out how long the company has been doing business. If possible, get reports from previous clients to find out if their services are satisfactory. Clarify all points of the debt consolidation loan to prevent future complications that may arise.

A Brief Introduction To Counselling

The psychological counselling process follows a defined path of steps in a sequence. It is important to follow this process because of the power of human emotions and because of the real need to arrive at a desired outcome of the counselling.

Listening and Observation

The first step is one of active listening and observing the client. Is he or she relaxed or disturbed and agitated? Can eye contact be held or is the person's attention darting and being deflected everywhere? Is the body language telling you something? Is the body posture generally open or closed and defensive? (Self protective.)

Facing Negative Emotions

Are there any clearly dominant negative emotions such as anxiety, fear, anger or guilt? These will need to be acknowledged and 'fed back' to the client as being observable, real events that need to be dealt with. Unless these negative feelings are actively confronted, no progress can be made with behavior modification and with goal setting. This task of providing feedback on negativity and bringing strong emotions into the light of day may take a considerable amount of time over several one hour sessions. Statements like, 'I see you are really angry about something' can be helpful. Also, 'so you've been worrying a lot lately.'

Positive Suggestion and Options

Some suggestions like, 'you can do something about this,' may be timely and empowering. Build up the perception of skills and self esteem. 'You have real ability and you can learn more skills to beat this thing. Deep inside, you can imagine now and think up some solutions.'

'What are the options facing you?' leads to a creative brainstorming with the client about how to start moving towards a lasting solution.

Goal Setting

'So what do you really want?' becomes the start of finding goals that really follow the interests and desires of the client. The question, 'what would you need to do first?' leads to sub goals and tasks that must be fulfilled in order to achieve the primary goal. The counselor's goal is to draw this information out of the person instead of imposing one's values and beliefs.

Reinforcement

Systematically rewarding all progress including any 'baby steps' taken in the right direction; i.e., towards the agreed upon goals. Reward in this context of counselling means giving the person your focused attention, acceptance, approval and praise. These social reinforcers are very potent in supporting changes in behavior.

Conclusion

As you are beginning to realize, counselling techniques are not particularly complicated, but they do need to follow a set order or sequence. In fact, psychological counselling may be summarized in two rather direct questions:

1. 'How are you feeling?'

2. 'What do you want?'

The psychology here looks at first glance to be oversimplified, but is it really? Results will follow when this sequence is used with the appropriate sensitivity and empathy. Take care with other people and always remember to consult a trained and registered health practitioner when confronting mental health problems of severity, when human life may be at risk. This article is provided for educational purposes only. It is not intended for therapeutic application.