Are you suffering from debt and is looking for a way out? Debt relief is something that a lot of people dream of. Financial freedom makes them sleep at night better and of course, it lessens every day stress.
However, getting rid of debt completely doesn’t happen in a snap of a finger. It is a long process that you have to be committed to. Sometimes, you may feel like giving up but believe that there’s a light at the end of the tunnel and that debt relief is indeed possible.
One of the most effective and popular ways to eliminate debt is through a debt management plan. But the thing is it’s not for everyone. A credit counseling agency can help you start his program. They will also analyze your financial situation and suggest the best plan for you. Other things that they can do is to negotiate with your creditors for lower interest rates and organize your monthly payments among your creditors.
Is It for You?
How would you know if a debt management plan is the best debt relief program for you?
- No Payment Increases- Since your credit counselor will negotiate on your behalf, you can expect that your payments won’t increase.
- Close Credit Card Accounts- The program will force you to close any credit card account you have for the sole reason that you should avoid using them to incur more debts.
- Lower Rates and Removal of Late Fees- This program can help negotiate for lower interest rates and even remove the late fees. Thus, making it easy for you to pay your debts.
- Multiple Payments Organized- If you can’t monitor all the monthly payments, the credit counselor can help with this. You just pay them the total amount and they will take care of dividing the payment to your creditors.
Why It’s Not for You
A debt management plan is not for people who cannot make sure that they pay their debts monthly. It is composed of a rigid payment plan where one cannot skip on monthly payments, or else, a drop out rate will be enforced. In addition, this debt relief program is not for people who doesn’t have a steady monthly income and who cannot avoid using credit cards. In short, you cannot use this program if you don’t have enough cash monthly.
With this debt management plan, your credit score may be affected. Your creditors can put a negative note in your consumer credit report. Further, this program isn’t for people with secured debts. Only unsecured debts can be helped.
You are on your way to debt relief, but do assess if this is the most effective way for you. If not, discuss with a credit counselor on other debt elimination programs you can do.
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