A debt consultation is made up of a debtor and a third party service provider, to evaluate debt to income ratios and devise a budget plan to relieve the debtor of obligations. Debt consultations are usually free of charge for the first visit, and depending on the organization, free of charge for all subsequent visits. If the third party works as a middle man between the creditor and the debtor, then a commission for this service may be required.
This commission tends to be paid by the creditor, if they receive money because of the debt consultation service company's efforts and followed an elimination budget plan. If the creditor does not receive a settlement payment or an agreeable payment plan, the commission rate will fall on the shoulders of the debtor. Professionals assisting with debt consultations try very hard to eliminate the possibility of debtor paid commissions. After all, the debtor is in trouble already because of money, the added stress of cash flow needed to get out of credit problems is a wicked circle.
Seeking the help of a consultant could also be a precursor for a decision to file for bankruptcy. In this case the debt consultation is done by a lawyer. This most definitely will cost the debtor something, assuming that the attorney is not a free working non-profit attorney. If money from debt consultations is an issue, there are many agencies and organizations that offer free services. The consumer must be sure to check with the BBB or Better Business Bureau before enrolling with any company offering this service. A consumer does not want to be pitched for a sale; they want to create a plan to get out of debt.
"Give us help from trouble: for vain is the help of man" (Psalm 108:12). The process of seeking assistance will lead the individual to creating a plan of action. An evaluation of what obligations, how much, and why money is owed will allow the consumer to understand their situation better. This will allow the individual to determine which financial management route to pick. If a consumer finds themselves in need of more thorough debt consultations, resources and links can be found online, in newspapers, in the phone book, and in county social service agencies. Attending a debt consultation meeting may be the deciding factor in recognizing that there are bad spending habits within the household and additional help may be needed.