What is Christian Debt Counseling

Wondering if Christian debt counseling can help you with your debt problems?

Christian debt counseling, also referred to as credit counseling, is a comprehensive approach to debt management that can often incorporate the various Christian debt services (debt management, debt consolidation, etc.). The terminology can be a bit confusing as debt counseling, debt management, and debt consolidation are sometimes used interchangeably even though the services are quite different. When evaluating Christian debt counseling programs, be sure you understand exactly what services are provided.

Role of Debt Counselor

Since there are a variety of debt repayment options, a debt counselor can help you to decide which service will be most beneficial to you in eliminating your debt. This requires a very personal approach in evaluating your current financial status. A debt counselor should be able to make an objective assessment of your debts, income, and necessary living expenses to recommend a plan that best fits your situation.

A good debt counselor should also offer more than just a payment plan or loan to tackle your debt issues. They should teach you how to better handle your finances. This will help you avoid accruing debt again in the future rather than just paying off your current debt. Without changes in your money management behaviors, you may pay off your debts for now only to generate more debt further down the road. You can not allow that to happen.

Downside of Debt Counseling

Like debt management services, your involvement in a debt counseling program may show up on your credit report. This is a very important point to consider before committing yourself to this avenue. If you are considering debt counseling, evaluate different service providers and specifically ask whether your inclusion in their program will be listed on your credit report.

Because debt counseling is such a general term, it is possible that you may be able to find a Christian debt counseling service that provides guidance and support to help you pay off your debts yourself. This would avoid any mention on your credit report and may be all you require if you are still in control of your debt payments. 

Finally, do not assume that a debt counseling company with a Christian name is truly a Christian organization. Unfortunately, there are many companies looking to take advantage of people struggling with debt and a Christian name is no assurance that a debt service provider is operating under Christian principles. Before choosing any Christian debt counseling service, ask many questions and check with the Better Business Bureau.

When you are struggling with what seems to be insurmountable debt, it is easy to feel overwhelmed and discouraged. Because of this, it is easy to feel pressured to make a quick decision to sign up with just any debt service provider. Don’t allow this to happen. It is critical that you weigh your options carefully when evaluating Christian debt services like Christian debt consolidation or counseling.

Every debt service has its own pros and cons. Making the right choice to help you meet your debt elimination goal is dependent on your particular situation. Before evaluating your options, first evaluate your finances.

List Your Debts and Income

Sit down and write out a list of all your debts including the amounts, the interest rates, and the minimum payments. Next write down your monthly income and your other bills – housing, insurance, grocery budget, etc. Subtract all of your expenses (minus the debt) from your current income and determine how much money is left. Is the amount left over enough to cover at least the minimum payments on all your debt? Are there some bills you could eliminate that are non-essentials (like cable TV)?

If you do not have enough income left over after paying your basics expenses to cover at least the minimum payments on your debts, then you will likely need some help. If you are able to make your minimum payments but are still purchasing items with your credit card, you again may need some help. Determining what your total finances look like on paper will help you determine your best choice in a Christian debt service provider.

Evaluate the Debt Services Carefully

Once you have established your areas of weakness with regards to your financial position, you will be prepared to evaluate the various debt service options. Again, do not rush into anything, take some time to shop around and get a feel for what each service provides. Most places should offer a free consultation. Ask for a list of the services that are included and their associated fees and get it in writing.

Once you have familiarized yourself with the services available to you, you will need to determine which service will be able to help you pay off your debt the fastest and with the fewest strings attached. If a company will reduce the interest rates on your debts but charges a lot of fees, then you will not gain much in the long run. The key here is to stay committed to quick debt elimination, not temporary relief from the stress of paying your debt by hiring just any Christian debt service.