What You Should Know About Debt Counselling
Updated: Jul 12, 2021
With loans and credit card bills piling up, it can be hard to see a way out of ever paying those loans off.
Apart from debt collection services, Double Ace Associates also provides debt counselling. If you are losing sleep over financial woes, you might want to consider contacting our slew of debt counsellors, who can help prioritise your payments and create an action plan for getting debt-free.
1. What does a debt counsellor do?
The number one goal for Double Ace Associates is to always understand our client’s top financial goal. By finding this out, we can empower them to resolve the issue and stay focused. As such, during our counselling sessions, we would often prompt questions that would help us find out more about a client’s financial situation. This would help us understand what they want to see accomplished.
Our goal is not to steer our clients in any one direction, but to give them unbiased information and advice based on our rich experience in this sector. Usually, the biggest problem for clients is often a fear of the unknown, and being unaware of what options there are.
2. Why should you consider debt counselling?
Through our experience, people often realise that they can’t make a payment on a debt or that the money they are making isn’t enough to take care of the debt too late. As such, it would be wise to seek advice from us in order to plan out your debt recovery plan in a more efficient way.
3. What can you expect from a session with our debt counsellors?
Under our debt counselling sessions, we make sure to keep all information clients provide strictly confidential. Next, we would try to find out their financial situation by asking questions such as: Are they working full-time? Do they work multiple jobs? How many people in the household are working?
Once that's done, we create an action plan, involving them in the process of accomplishing their goals. In the end, we at Double Ace Associates want you to know that when you call us, there is a person on the other end of the phone who does care about you - and may have once been in the same situation.
4. How much debt is too much?
We observed that payments should not exceed more than 31% of an individual’s gross income.
For individuals who want to open up credit card accounts, it would be wise if they were financially stable enough to pay the expenses off at the end of the month. If that is not possible, they would then have to figure out what the purchase is going to cost them if they are going to pay additional interest on top of the purchase.
You should not have more than 19% of your gross income going to debt. When factoring in taxes, insurance and retirement, that would mean 50% of your gross income walking out the door. An important question to ask yourself is if you are mostly working just to pay off debt.
5. How can people avoid building up "bad" debt?
We would advise all clients to always track their spending. Usually, we would advise clients to observe their spending habits by writing down what they spend on for 7 days. In the vast majority of cases, within five days, after observation of their own spending habits, the client would often start making changes. This is because the action of writing it down compels individuals to acknowledge what they are spending on, which makes them more aware of what they can SAVE on.
In addition, we would also advise clients to make a spending and savings plan that is to be looked at every month. These two plans are bound to change as your budget would definitely not stay the same for every month of the year. By knowing more about your own spending habits, you are exerting control and power over your financial life.