We answer your questions about credit counseling: Part 1

If you've been browsing the Advantage CCS Web site, you might have noticed that we offer many tips to help you manage your finances and a lot of advice about credit counseling and debt management. But if you're like many of our potential clients, you probably have questions about the credit counseling process. Popular questions include, “How do I know when I need credit counseling,” and “What businesses offer reputable credit counseling services?” We hope we can answer some of your questions with this two-part series.

How can I tell that I need in-house or online credit counseling?

There are several clear warning signs that indicate you might need credit counseling. We'll explore them in greater detail below:

1. Your debts and spending exceed your income, and you don't know what to do about it.

This is one of the most common reasons for seeking credit counseling. One of the biggest benefits you'll reap from counseling if this describes your situation is that credit counseling sessions are tailored to suit you, you, you.

If you're a recent college grad, find yourself financially severed from your parents (perhaps for the first time), and are making an entry-level salary, then you might be staggering under the weight of student loans -- and possibly frivolous spending habits. This is a popular topic – in fact, the Washington Post runs a series on life as a new grad every year – and as Generation Y continues to replace Baby Boomers in the workforce, there can only be more public discussion about the financial woes of the young adult set.

Life happens. Maybe you lost your Manhattan finance job after 9/11, and have never quite made the same salary since. Perhaps you bought a new home on a sub prime mortgage in Cincinnati, Ohio, and you're scrambling frantically to sell or foreclose. Maybe you or a close relative has fallen ill. Whatever your situation, you're finding now that you don't earn enough money to pay your bills or pay off your debts.

You need to learn how to manage your money and your credit cards correctly now. It is possible to begin adult life with no idea how to manage your income and debts today, and it is equally possible to begin adult life on solid financial footing only to experience a complete reversal in your financial fortunes at age 50. Schedule an initial credit counseling session with Advantage CCS if you find yourself in a precarious financial situation.

2. The bill collectors are already calling, or you've been informed that most of your accounts have been turned over to collections.

If the above statement describes your situation more closely, you are already in deep financial trouble. You have had difficulty paying your bills for quite some time now and are truly beginning to reap the consequences of avoiding payment.

Medical bills are one of the biggest hurdles for Americans today. The Access Project, a community and social justice organization, released a grim report in 2007. A telephone survey of more than 1,000 low-to-middle income households demonstrated that 29 percent of individuals in debt had medical bills that contributed to that debt. Those households with medical debt carried an average debt load that was 46 percent higher than other households. And, millions of Americans are uninsured as it is. So if your medical bills are in collections, your problem is unfortunately common.

Don't delay in signing up for Advantage CCS credit counseling sessions if your bills are already in collections. Our counseling staff can help you handle your debtors while you work out a debt management plan and learn ways to be able to pay your bills again. You have options now, too. Justin Harelik, a journalist for Bankrate.com, advises that people who have bills in collections have several options, including negotiating with debtors, filing for bankruptcy, and hiring legal help. Your Advantage CCS credit counselor can help you decide – cautiously and judiciously, of course – which course of action is best for you. Don't go at this alone!

Perhaps, after reading this article, you have determined that you need credit counseling services. Are you still having trouble deciding what credit counseling services to choose? Read on to Part 2 of “We answer your questions about credit counseling.”