Debt Management Plan
In this tough economy, so many consumers just like you are struggling to pay off their debts and are seeking relief with the help of a debt management plan. Perhaps they have either lost their jobs, had unexpected medical bills to pay off, or maybe they simply went overboard with an impulse buy. Regardless of how you have found yourself in debt, we can provide you with expert information on a variety of debt-relief services - such as getting set up on a debt management plan--which are all designed to help you get a better handle on your finances, create a budgeting plan, and get you on the road to being debt free.
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Keep in mind that the decision to get out of debt starts with being well informed about all the different methods and services that can help reduce the amount of unsecured debt that you've accumulated. For some people, debt relief may come in the form of a debt management program, or what some may refer to as a debt management plan (DMP), which is typically offered by credit counseling agencies and debt management companies.
Under a debt management program, your unsecured debts will normally be consolidated into one monthly payment that will be made to a credit counseling agency. Acting on your behalf, that credit counseling agency will then distribute your monthly payment to various creditors based on the repayment plan they have negotiated with your creditors. In many cases, once they have a clear picture of your finances, the debt management company or credit counseling agency will put you on a manageable and affordable repayment plan that you can adhere to each month. Also, be aware that there are different types of companies offering debt management plans.
Some companies offer what's known as a Christian debt management plan, which typically offers money management skills based on principles found in the Bible. You may also find non profit debt management companies or credit counseling agencies that offer free budget counseling and a variety of debt-relief services at very little cost to you. No matter which debt-relief service or company you may consider, we can steer you in the right direction and provide you more details about each approach.
Is Debt Management for You?
As you might have guessed, a debt management program is not for everyone. According to the Better Business Bureau, you should only consider signing up for a debt management plan after a certified credit counselor has spent time reviewing your financial situation, and has offered you customized advice on managing your money. For others, getting a debt consolidation loan may be a better option.
Companies that offer debt consolidation services will typically take multiple high interest rate debts and combine them into a single lower interest rate loan. Another approach that you might consider taking is to enlist the services of a debt settlement company, which may agree to "forgive or settle" your debt for a much lesser amount than what you owed.
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What About Debt Settlement?
Under a debt settlement program, which is sometimes referred to as debt negotiation, your creditor may agree to forgive the rest of your debt in exchange for a one-time payment (the settlement). If you're considering debt settlement, keep in mind that some consumers may stop making payments to their creditors and put those funds aside towards paying off the settlement. Because they are not making payments, they run the risk of ruining their credit score.
Also, be aware of the fees involved under a debt settlement plan - some companies may charge a percentage of the total debt, while others may charge a percentage of the total savings after you settle, plus an initial fee and possibly other monthly charges. Another legitimate option that some people might consider is bankruptcy; this approach will ruin your credit score, but if you can file a Chapter 7 liquidation case, you may be able to pay down your debts and get a fresh start towards rebuilding your credit.
Debt Relief and the Better Business Bureau
If you are seriously thinking of working with a credit counseling agency that can put you under a debt management plan, the Better Business Bureau offers advice on how you can maximize its benefits and ensure that you pay down your debt as quickly as possible. It suggests making regular, timely payments, and always reading your monthly statements to make sure that your creditors are getting paid based on the plan they have agreed to with your credit counselor.
The Better Business Bureau also recommends that you contact the credit counselor responsible for your debt management plan if you are unable to make your scheduled payment, or if you discover that your creditors are not getting paid. We can help you get additional information about some of the debt management plans available to you right now, and guidance on how to adhere to a repayment plan.
Not surprisingly, the growing demand for debt management and other types of debt-relief services have spawned some well-known finance experts like Suze Orman, Dave Ramsey, and many others. Money guru and host of her own talk show, Suze Orman offers a number of money management tools and budgeting plans on her Web site, including a debt eliminator, an expense tracker, a compound interest forecaster, and other resources that many consumers like you have found to be effective with debt reduction.
On his site, Dave Ramsey touts tools like a budgeting software that can help you organize your monthly budget, calculate your expenses, and watch your progress as you tackle your debts. Or, if you're the type who prefers to use the latest technology, there is a host of debt management software-most of them free or low cost - with tools such as an automated payment plan, expense tracking, and a debt calculator.
Plan Your Plan
Regardless of the type of debt-relief service you choose - whether it's a debt management plan, a debt consolidation loan, or debt settlement - do your research and ask the right questions. Investigate the company's services, fees, certifications, and licensing requirements. Once you have a better picture of your finances, we can help you explore all the different options and debt-relief services available today. Remember, when it comes to finding solutions to your debt problem, the more informed you are, the better your chances of eliminating your debts once and for all.
Request a free debt relief analysis and savings estimate in minutes. Start by answering a few, simple questions here.