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Debt counseling (also referred to as credit counseling in some jurisdictions) is an educational process, aimed at getting the clients who go through it out of difficult debt situations they may already be in, and ideally, empowering the clients who go through it so as to never get themselves into such messy debt situations again.

And contrary to what one might imagine on first hearing about it, debt counseling is not a passive counseling process (where information is transferred from the counselor to the client), but rather more of an active intervention to get the client out of the difficult debt – with debt counselors often taking proactive steps such as renegotiation with creditors, aimed at restoring their client’s financial health.

When debt counseling involves the debt counselor taking the proactive steps to get the client out of debt, a debt management plan typically first has to be established with the creditors (through repayment renegotiation), with the establishment of such a debt management plan typically followed by closure of the client’s accounts with the creditors so that they don’t fall into debt – all these measures aimed at ultimately getting the debt counseling client out of debt.

Another common feature of debt counseling – beyond direct intervention in debt management, or where strategies like renegotiation with creditors fails – is advice to the clients to pursue debt management strategies aimed at making it easier for them to get out of debt, the strategies in question here being things like debt consolidation which has been known to lower the interest burden of debts considerably.

Most debt counseling agencies give their clients the option of either having a face to face consultation or consultation by phone. And with over 1,000 debt counseling agencies operating in the United States alone, there is no denying that the need for debt counseling services in the society is great, as people are always prone to fall into difficult debt situations, sometimes due to no faults of their own (like where a heavily indebted person who was nevertheless managing their debts competently happens to lose their job suddenly).

And debt counseling services have in some countries come to be viewed as important social services, with people filing for bankruptcy in countries like the United States, for instance, having to go through debt counseling first in an effort to find ways to have them repay their debts somehow, and thereby avert the whole bankruptcy thing altogether. And while still at it, it is important to take note of the fact that having gone through debt counseling can be a negative reflection on one’s credit history.

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