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.

Are you considering Christian Debt Management?

A debt management program involves hiring a credit counseling company to act as a third party to help you, the debtor, repay your debt obligations. Through a debt management plan, you can, in theory, secure a lower and more manageable monthly payment along with lower interest rates. There are, however, some very serious drawbacks to debt management programs that should be considered.

The first question to ask yourself before enrolling in a Christian debt management program is whether you really need this level of help or not. If you are carrying multiple debts and having trouble paying everyone or you are dealing with credit collection calls, then you likely need some help. However, it is very important to remember that your participation in a debt management program will be reflected in your credit report.

This appearance of a Christian debt management program on your credit report necessitates serious consideration. This could impair your ability to make large purchases (like a car or home) for many years to come. In addition, a debt management program may involve some amount of debt settlement where the debt manager works with your creditors to “forgive” some of your debt. This is really not an option for a Christian as you are responsible before God to pay all your debts no matter how long it takes.

Unfortunately, as with any Christian debt service, a Christian debt management organization could be Christian in name only. There are many companies that call themselves Christian in order to gain your trust when in reality they do not operate according to Christian principles. Most Christian financial counselors would likely not recommend a debt management program for the reasons outlined above, so use caution when evaluating any Christian debt company.

If you are drowning in debt and unable to keep up payments, then some type of help may be necessary. Talk with your Pastor and find out if anyone in your church has financial training. Also, look for a non-profit Christian ministry that can help you with your financial situation without resorting to settlements, loans or damaging your credit score.

The true meaning of “Christian debt management” should mean to manage your debt  biblically – pay off your debts quickly and stay debt free through proper money management.

Like a ship needs a rudder, your finances need some steering through a proper budget to reach your debt free destination.  Without a plan, it would be difficult for you to identify which things are most important to finance and which things are not. Financial planning through the use of a budget is the key to paying off your debt quickly, avoiding debt in the future, and ultimately being debt free.

Budgeting your money is the choice to decide ahead of time what exactly you want to spend your money on. It is a decision to only devote so many dollars per month to non-essential items rather than succumbing to impulse spending. Whether you are in debt or not, having a budget is necessary to keep control over your finances.

The first place to start is to list all of your current expenses:  food, clothing, housing expenses, insurance, etc. When budgeting, you will need to evaluate whether each of your expenses falls under essentials or non-essentials (needs or wants). This helps you understand what areas of your spending need to be modified to reach your financial goals. If you are trying to pay off debt, you will want to identify and reduce your non-essential expenditures to funnel more of your money towards eliminating your debt.

There are many ways to budget your money and you can find a variety of forms online that can help you get started. Do a search on “free budget forms” to see what is available. If your debt situation has you feeling like you are in over your head, you may want to consider hiring a financial advisor or a debt counselor. While this may seem like an unnecessary expense, some people need the guidance and accountability of an advisor to start them on the right path.

For married couples, it is important to work on your budget together. Establish long-term and short-term goals that are realistic and tangible. Each spouse must be dedicated and committed to sticking with the budget to reach joint goals and to avoid any strain on the relationship.

A solid budget is one of the first steps in becoming debt free. A budget will help you redirect your spending on non-essentials towards your debt to get it paid off quickly and teach you how to control your spending to avoid future debt problems. Today is the day to take control of your spending through debt free budgeting and reach your financial goals. Are you ready?

Christian debt consolidation is performed in the same way as non-Christian debt consolidation – one loan is taken out to pay off many smaller debts. The supposed advantage of having one large loan is that an interest rate can be secured that is usually lower than the interest rates being paid on the smaller debts, especially when high-interest credit cards are involved. The second supposed advantage is the convenience of one payment that is designed to be an affordable monthly payment based on your current financial status.

Is Debt Consolidation Right for You?

If you are having trouble keeping up with your debt payments, owe money to multiple lenders, or are paying high interest rates on some or all of your debts, then debt consolidation may be a necessary evil for you. A debt consolidation loan could help you to save money on interest charges and simplify your payment plan. But if there is any way possible for you to avoid a consolidation loan and pay off your debt on your own, you should.

Disadvantages of Debt Consolidation

There are many disadvantages to consider when evaluating debt consolidation. First, often times a consolidation loan will require collateral which for most people is their home. As with any home equity loan, failure to pay could jeopardize your house, so these types of loans should be taken seriously. Second, there are many fees involved with these types of loans so be sure to determine whether a lower interest rate plus the associated fees will actually be saving you money. Finally, a debt consolidation loan often has longer terms, much like a home loan. While this may be necessary to result in a monthly payment you can afford, this could prolong the time it takes you to finally pay off all of your debt.

Christian Debt Consolidation

A Christian debt consolidation loan involves finding a Christian organization that specializes in these types of loans. Provided that the organization is not just Christian in name only, a Christian debt consolidation provider should provide financial advice that meets with biblical principles. It is also possible that a Christian organization may be able to provide their services at a reduced rate if they are funded by outside donations.

Whether you choose a Christian service provider or not, be sure you do your homework before deciding on debt consolidation. There are many scams or less than helpful debt consolidation programs available, so if you can avoid this route altogether, the better off you will be. If you cannot pay off your debt own your own, look for a non-profit Christian financial organization in your area that is recommended by someone you know.