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Anyone who's capable of earning wages, salaries or
commissions, can make use of this plan. It should in no way be
thought of as bankruptcy. This is simply a court supervised
method for a borrower to pay off his debts. The borrower simply
draws up a plan to pay off his debts over a three-year period. If
the court accepts the plan, the lenders are almost obligated to
accept it. While more recent bankruptcy laws still leave room for
abuse by dishonest "big business," they fortunately have improved
the outlook for the "little guy."
Your job as a Credit and Debt Counselor is to meet with the
overextended borrower, listen to his problems, and help him to
plan a budget to live by, and set up a plan for the proper
management of his income that will include money for him to live
on, plus regular payments to his creditors. In the beginning, you
can meet in the borrower's home, pretty much the same way an
insurance agent does. Later on, you'll probably want your own
office, but a formal office for your business will never be
absolutely necessary.
Many people are reluctant to be seen walking into a Credit
Counselor's office. Again, there's a personal embarrassment - the
thought of their friends seeing them, and the worry of what other
people will think of them. So if you do opt for an office, make
it as unobtrusive and as confidential as possible. A sign stating
"Money Management Consultant" would be appropriate. Gaining the
confidence and trust of your clients will be the secret of your
success. And do not underestimate the power of "word-of-mouth"
recommendations by grateful clients.
Follow the methods of the insurance salesman, making
everything as comfortable as possible for your clients. So long
as you listen to your client's problems, and then work with him to
plan a budget he can live with while paying off his bills, you
won't be required to have a license in most states. You simply
listen, assist the borrower in planning a budget, and he
administers it himself. He makes all the contacts with his
creditors, and makes all the payments directly to them. To give
you the money and have you disburse it among his creditors would
require a license for your business.
Step two in your service is to find out the total amount of
cash your client has coming in each month, and on what dates.
Calculate according to his current obligations, how much he needs
for living expenses: Rent or mortgage payment, utilities, food
and clothing. The remainder of his available income is then
budgeted for division among his creditors.
One of the best (and easiest) methods of money management
within a budget is via envelopes. The wage earner marks a
different envelope for each of his obligations. He then makes
predetermined amount of deposit in each of these envelopes each
payday.
Thus, if his mortgage was $500 per month, and he brought home
$750 each pay day, you'd probably advise that he "deposit" $250
each payday into the mortgage envelope. And so it would be with
each payment envelope.
Many people find this kind of system scary in the beginning,
but after they've used it for a month, they swear by it as the
only way to keep bills up to date.
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