Debt Management Plan-How to Avoid Bankruptcy
Debt Management Plan-How to Avoid Bankruptcy
IYou're deep in debt and don't know how you're going to pay them off. You need help and a Debt Management Plan might possibly help. You've lost your job but need to pay your bills. . Whether you can or not will depend on your personal situation.
In a Debt Management Plan, your credit counseling organization takes over the management of most of your unsecured debts. They directly interact with your creditors in order to negotiate lower interest rates, eliminate fees, prioritize debt payments and arrange what you will pay. Before signing up for any Debt Management Plan, you need to find out the process and options that are available to you .
The benefit of a Debt Management Plan is that all the negotiations are done for you by credit counselor, after you sign-up and they pay your creditors. They may be able to provide a timeline for getting you out of debt.
.Finding a reputable credit-counseling agency means research. If you have found one, check with a reputable business bureau . Another option would be to talk with your creditors and see if they work with the credit counseling agency in the past.
.Before making any financial decision, one of the first and most necessary steps is to figure out just how much money you have coming in, how much is going out, how much of your spending is necessary and how much isn't.
You have to discuss these points with your counselor before taking the final decision:
1.Find out how much will your monthly payment be .This is an important fact to know because the plan will work if you have the ability to pay.
2.Find out from your creditors and credit counseling agency the impact on your credit score..
3 Are there other options beside a debt management plan.
Like any major financial decision, you need to take time some time to do research and think about it. Don't simply sign-up at the first meeting with a credit counselor; you may be in for a big surprise.
Here are some further issues you should check:
1.Check with your creditors to confirm that the credit-counseling agency can provide any concession they agree with you.
2. Talk to your credit counselor about when payments are going to be made and confirm that this will coincide with the payment due dates for your creditors.
3.As with any account you open, you need to know the position of your account. Find out how you are going to check the status of your account and how often it can be checked and what types of information will be provided. If this service isn't available, you need to find a different agency. .
When you finally sign up for the debt management plan, you need to watch the implementation.
You are to ensure the following in the implementation of your Debt Management Plan.
1.Your Debt Management Plan only works if your creditors accept the proposed plan. If it hasn't been accepted, then you should contact your credit-counseling agency again before sending them payments.
.2. You have to know when your debt management plan start..
3.Check your monthly statements and call your creditors monthly to confirm timely payment, interest rates, elimination of fees, etc. .
Since a Debt Management Plan is just a step away from bankruptcy, if it is not going to work for you, you might want to consider bankruptcy. Whatever you decide to do, remember that financial issues can be very emotional, and overwhelming. Debt is stressful and there are other consequences besides the obvious financial consequences. The earlier you seek help, the earlier the emotional strain can be relieved and you can get on with the rest of your life.
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