Today morning, my wife interrupted my normal Newspaper time and told me to read an article about Defaulter Helpline. Not that I’m a defaulter nor am I chronically indebted. However, this article can be a preventive measure if you’re in a similar situation or might fall if you don’t take care of your loans, debt, credit cards usage.
I wasn’t aware that India has setup institutes where you can get Credit Counselling to reorganize your debt and prevent your income from eroding. You can overcome the debt burden and improve your money management skills too. Abhay and Disha are two initiatives, supported by the Bank of India and ICIC Bank Limited, started in early 2007. They cover the broad categories of – Financial Education, Credit Counselling and Debt Management.
Most developed countries have a centralized counselling centre, started by a number of banking companies together. The National Foundation for Credit Counselling (NFCC) in the US and Consumer Credit Counselling Service (CCCS) in UK are similar initiatives setup in 1951 and 1993 respectively. Other developed countries like Canada and Singapore have similar centers.
These centers conduct one-on-one sessions with financially distressed borrowers. They then contact the nodal officers of banks involved and brief them on the broad indebtedness of the borrower. They usually follow 3
# examine ways to solve current financial problems
# create awareness about the costs of misusing credit (it improves financial management and develops realistic spending plans)
# advises distressed people on gaining access to the structured financial system, including banking
There are even options for pre-credit and post-credit counselling. Pre-credit counselling helps borrowers to decide upon the quantum of loans they can avail, based on their income profile and stream of cash flows. More importantly, the institutes attempts to influence the stability of the borrowers’ flow of income and expenses, thereby lowering the probability of default. Post counselling typically occurs after a crash event, when the borrower has already missed one or several payments.
So, Credit Counselling can help you reset and then restart your life all over again.