How to prepare for your first meeting with a credit counsellor

By Emma Lunn

Admitting you have a debt problem is the first step to tackling it. The next step may involve meeting with a credit counsellor if you can't get your debt under control.

If you need help from a third-party, you're not alone -- the Citizens Advice Bureau reports that it has handled an average of 8,551 cases of new debt problems  every day so far this year through the end of March, according to money education charity Credit Action. Sharing your debt problems with a stranger can be intimidating, so it helps to know what to expect from your first meeting with a credit counsellor -- and how to prepare. debt-counselling-meeting

Do I have to have a face-to-face meeting?
The free debt advice sector offers a variety of ways for you to access debt help, allowing you to choose the way in which you are most comfortable. If you want to keep your identity secret, online debt counselling through the Consumer Credit Counselling Service's Debt Remedy takes about 20 minutes, and can be done anonymously any time of the day or night. There is no need to disclose your name or personal details -- simply fill out a questionnaire, and receive advice based on your situation.

If you would like more customised advice, or would like to speak to someone personally, you  can phone CCCS (0800 138 1111) or National Debtline (0808 808 4000) to speak with a counsellor via telephone. Or, you can make an appointment at your local Citizens Advice Bureau for face-to-face advice.

What you need for your first meeting
Your first contact with a debt counselling charity -- whether by phone or in person -- will involve going through your credit commitments, your income and outgoings. So bring as much information as you can to help the counsellor understand your situation. National Debtline spokesman Paul Crayston recommends having, at a minimum, details about your income, your expenses and your debts.

"This will enable the advice to be more accurate and tailored to your specific circumstances," Crayston says.

According to CCCS, other items to bring might include:

  • Court orders and any court paperwork involving your debts.
  • Billing statements for utilities, rent or other bills.
  • A list of credit card and loan balances.
  • A list of your assets and their value.

With that information in hand, you and the counsellor will spend the meeting putting together a budget, finding places to cut spending, discussing ways you can increase income and building a game plan for tackling your debts.

Expect the first advice session to last from 15 minutes to more than an hour, depending on the complexity of your situation, Crayston says.

What if I'm embarrassed about my debt?
The important thing is to be honest about your debts and spending patterns. Hiding things from a credit counsellor because you feel guilty or ashamed won't help in the long run.

"The main thing to remember when you first talk to a debt counsellor from a charity is that they will not judge you," says CCCS spokeswoman Una Farrell. "They talk to people every day who are struggling with debt and understand how complicated personal finances are and how easy it is to find yourself with a debt problem."

If your debt is causing you extreme anxiety, you may need to get help elsewhere, Crayston says.

"Debt advisers and debt counsellors speak to many people about money problems, so you can expect them to understand what you're going through," says Crayston, "However, debt can lead to problems such as severe stress for which you should seek more specialist help from your general practitioner."

What's next?
In some cases, sticking to the budget developed in the first meeting and prioritising the most important and expensive debts will be enough to help people get their debts under control.

In other cases, the credit counsellor may recommend another course of action such as a debt management plan or a debt relief order. What's suitable for you will depend on your circumstances. If a more severe remedy such as an individual voluntary arrangement (IVA) or bankruptcy is the only solution, the debt counsellor will be able to explain how these work and the consequences.

See related: A guide to the bankruptcy process, Credit counsellors share consumers' biggest credit card mistakes

Published: 1 August 2012