Credit Debt Counselling

Here's a business idea that meets all the aspirations of the American Dream.

You can start small with little or no investment, develop it in your spare time, and parlay it into a $100,000 a year income - all within the next twelve months or so.

Really, all it takes to move on this one is empathy for people, a basic understanding of money management, about 500 business cards, some smart advertising, and you are in business. Your greatest expense or investment, of course, will be for advertising.

The first and most important thing to learn is the "thought processes" in the minds of the people or firms that lend money. No one lends money with the thoughts of foreclosing on the loan and taking away a borrower's collateral.

Whenever the lender is forced into such a situation, everybody loses. The borrower loses his possessions, and the lender ends up with about one tenth of the money he originally loaned out.

Therefore, the lending institution will generally do everything possible to work with the borrower as long as he continues to show good faith in attempting to repay the full amount of the loan.

The most important thing a borrower should do, once he finds himself in a financial bind, is get in touch with his creditors and apprise them of his situation. Usually, the lender will set up a meeting for an open discussion between himself and the borrower, in order to adjust or work out a more convenient repayment schedule.

Most people who borrow money are having money management problems to begin with, and are actually terrified to death at the thought of people from the loan company calling them. Although they generally won't admit it, most are aware that they are having problems managing their money.

They are embarrassed about it, and instead of openly seeking help, they attempt to cover up the problem, and then hide from or avoid the very people who want to help them.

Over the past three years, personal and small business bankruptcies have been soaring to record levels. At the bottom line, very few people want to file bankruptcy against their creditors, because regardless how easy it is, the thought of having "gone bankrupt," still leaves a stigma.

And this is where you step in with your Professional Credit and Debt Counseling Service. You should never have any trouble finding clients.

Remember, step one is always to notify the client's creditors. This is the first instruction (or job) that you give to the client after you've heard his story.

The borrower should be the one to notify the creditors, and ideally, he should call each on the phone, set up a meeting and then discuss with the lender his current financial situation as well as his plans to rectify the problems, and resume payments. The plan he'll discuss with the lender will be the plan you assist him in setting up.

If the borrower is in over his head and with no other alternative, you should immediately advise him to file for relief under "The Wage Earner's Plan," as explained in Chapter 13 of the Federal Bankruptcy Act.

In essence, this "plan" gives the debtor time to regroup and reorganize his financial situation without being hounded by bill collectors.

Anyone who's capable of earning wages, salaries or commissions, can make use of this plan. It should in no way be thought of as bankruptcy. This is simply a court-supervised method for a borrower to pay off his debts.

The borrower simply draws up a plan to pay off his debts over a three-year period. If the court accepts the plan, the lenders are almost obligated to accept it. While more recent bankruptcy laws still leave room for abuse by dishonest "big business," they fortunately have improved the outlook for the "little guy."

Your job as a Credit and Debt Counselor is to meet with the overextended borrower, listen to his problems, and help him to plan a budget to live by, and set up a plan for the proper management of his income that will include money for him to live on, plus regular payments to his creditors.

In the beginning, you can meet in the borrower's home, pretty much the same way an insurance agent does. Later on, you will probably want your own office, but a formal office for your business will never be absolutely necessary.

Many people are reluctant to be seen walking into a Credit Counselor's office. Again, there's a personal embarrassment - the thought of their friends seeing them, and the worry of what other people will think of them. So if you do opt for an office, make it as unobtrusive and as confidential as possible. A sign stating "Money Management Consultant" would be appropriate. Gaining the confidence and trust of your clients will be the secret of your success. And do not underestimate the power of "word-of-mouth" recommendations by grateful clients.

Follow the methods of the insurance salesman, making everything as comfortable as possible for your clients. So long as you listen to your client's problems, and then work with him to plan a budget he can live with while paying off his bills, you won't be required to have a license in most states.

You simply listen, assist the borrower in planning a budget, and he administers it himself. He makes all the contacts with his creditors, and makes all the payments directly to them. To give you the money and have you disburse it among his creditors would require a license for your business.

Step two in your service is to find out the total amount of cash your client has coming in each month, and on what dates. Calculate according to his current obligations, how much he needs for living expenses: Rent or mortgage payment, utilities, food and clothing. The remainder of his available income is then budgeted for division among his creditors.

To be continued! To be continued! To be continued! To be continued! To be continued!