Many people think about filing for bankruptcy in face of bad debt. However, before taking any drastic step, you should first seek advice from a trusted credit counseling agency. In fact, the new bankruptcy law requires consumers to take up a credit counseling course at least six months before submitting their bankruptcy application.

If you’re not sure whether or not you should seek professional credit counseling service, consider the following pointers:

Creditors are calling you to collect payment. Do you get constant calls from your creditors because of past due payments? If yes, do not ignore the signs of bad credit. Instead of ignoring your creditors, the best thing to do is speak with them and try to work out a negotiation.

Remember that as you skip your monthly payments, your debts can quickly build up due to the additional interest rate and late penalty charges. If you don’t take action right away, it may be too late to ask for negotiation.

Don’t wait until creditors pass on debt collection to another agency as it will be more difficult to negotiate with debt collectors. If you think you cannot negotiate on your own, ask help from a trusted credit counseling agency who can negotiate on your behalf.

Your monthly salary is not enough to cover for your expenses. If you are having difficulty distributing your monthly earnings between your expenses and debt repayment, a credit counselor can help you create an efficient financial plan.

You need to use your credit card in order to get by. Do you charge daily expenses to your credit card because you don’t have cash to pay for them like you used to? If yes, then it is a clear sign of an impending financial disaster. Remember that credit cards carry high interest rates and penalties which can instantly put you in bad debt. Furthermore, if you fail to submit your payments within 60 days, your credit card issuer can increase your current interest rate.

You need to take out a short term loan to pay for another debt. Do you need to take out a short term loan to pay another creditor? If you do, you’re putting yourself at a greater risk of bad debt since short term loans often carry very high rates and fees. Instead of borrowing money to pay debts, seek advice from a financial specialist.

Money matters get in the way of your personal relationships. Compulsive shopping and gambling addiction are behavioural issues that needs to be addressed right away. A professional credit counselor will not only give you advice on how to get out of debt but will also help you recover from behavioural issues for a long term debt relief.

Seek Help Now!

Do not wait until your debt situation worsens before taking credit counseling. Attending credit counseling sessions will not damage your credit history. In fact, a trusted credit counselor can help you recover from a bad debt situation now so that you will not have to file for bankruptcy.