Forms of Financial Counseling

Financial counseling is a broad term that describes all types of meeting and resolution regarding debt problems. It usually involves borrowers seeking third-party help from an expert source regarding financial matters, such as creditor problems. Different counselors and consultants have different financial specialties and some focus on offering only one type of service.

Credit Counseling and Debt Management

Credit counseling and debt management concern debts that the borrower is having difficulty paying. The borrower may be late in several payments, or may not know how to meet future payments due to financial hardship. The third party helps the borrower create a repayment plan for late debts before they become an even more serious problem. There are nonprofit organizations that offer some of these services, but others seek a form of payment.

Bankruptcy Counseling

Bankruptcy counseling is a form of debt management, but it is assigned by the court when a person files for bankruptcy. In this case, a trustee is appointed who works with the creditors and the debtor to help discharge debts and cover certain key expenses. In a chapter 13 bankruptcy, this trustee helps create a repayment plan for the borrower to follow, usually for a set amount of time until the court allows the remaining debts to be discharged.

Financial Planning

Financial planning is more of a consultant position than the other options. In financial planning, individuals and businesses have a particular goal. They may want to avoid incurring future debts, or want to find enough funding for a specific project. Financial planners work with them to help set realistic goals and practice good financial habits.

Trust Officers

Trust officers work with banks and other investment institutions to help manage trust accounts and other funds. These officers advise the owners of the accounts regarding good investment strategies and money management, answering any questions the owners have. Trust officers may also act as executors of estates or work as accountants or lawyers, depending on the situation.