Debt Management Services
Some “credit counselors” or “debt managers” use the term’s consumer debt management or debt management plan for their programs, which consolidates your unsecured debts into one lower monthly payment, by reducing your interest rates, which they send directly to your creditors. Those programs are typically designed for the benefit of both the consumer and creditor by keeping you paying your obligations on terms agreed to by the creditor. Typically, these counselors/managers receive fees directly from the creditors themselves for two reasons; a debt specialist must complete a financial profile on the consumer that causes the creditor to believe the program will work. Once complete, the specialist will submit a detailed proposal to the creditor(s) and provide timely payments each month on behalf of the consumer. This program can be a win-win for both parties involved because, the creditors benefit by you continuing to make payments on the principal balance and a reduced interest rate and the consumer enjoys a lower monthly payment with a clear plan to financial freedom. This process while affective is a less aggressive method to becoming debt free as compared to debt settlement.
Debt Management is defined as the set of practices and programs to help you balance your income and your bills so that you can get your debts paid.
For some families, debt management could be the routine practice of spending less than one earns. But, for others where something unexpected has occurred, (for example, the loss of a job, fewer hours at work, or a medical bill) more serious debt management solutions are necessary to make ends meet.
At some point in our lives many of us have borrowed too much. When you're in over your head, your first feelings are of fear and despair. But make no mistake: sooner or later you must learn to live on what you earn. This is where a Debt Management Program may make the difference between spiraling toward bankruptcy and gaining control of your money again.
Debt Management Services can help people with heavy debt and damaged credit get their financial situation under control. Our Debt Management Services work seamlessly with our Debt Settlement programs that are designed to get you out of debt quickly without resorting to bankruptcy. We are focused on creating a plan to help you to “right-size” your debt so that you can get it paid off.
We begin by creating a Debt Management Plan that is customized for your specific situation. A debt management plan entails a series of steps that will enable us together to determine your options, to choose a debt management program, and provide a guide for controlling your spending. The first step typically involves compiling a list of all creditors and the amounts owed to each. This will include unsecured debt such as credit card, medical bills, and personal loans, as well as secured debt such as car loans and home mortgages and lines of credit.
Once a list of creditors is compiled and the amount of debt is totaled, we’ll help you to total your monthly income and expenditures, such as mortgage or rent payments, car payments, cost of living expenses, and so forth. Then we work together to help you identify spending patterns and shopping choices where you may be able to lower your expenses. In this step, and the next, we combine your knowledge of your family situation with our Debt Management Advice experience.
The next step is to assess the debt resolution options in light of the financial information that we have identified and the other facts of your family situation. These options may include enrolling in Debt Settlement Programs that will settle some debt amounts and exclude or lower any interest charged during the repayment period. We will help you to understand the benefits and the trade-offs of each type of program so that you can make an informed choice. This is a critical step, as it is important that once you choose a program that you commit to it. By understanding the various Debt Management Plans you will not have to second-guess yourself later, wondering if you did the right thing. You will know what is best for you and be ready to move forward toward your financial independence and out from the burdens of serving your creditors. Once your program is chosen, we will work with you to identify how you can afford to make payments and where funds will come from. We will help you prioritize payments and to set-up a special account for managing some of them.
Once you begin your Debt Management Program, your success will be tied directly to your continued funding of the program and continued balancing of your income and debt. We will provide you with tools for tracking your progress as well as Debt Management Counseling services to help you deal with issues that may arise.
However, it’s important to understand that participating in a debt management program can impact your credit profile, and that any available credit may be inaccessible for a period of time. As your debt is resolved, and if you continue to work your plan, you should see your credit score and your access to credit improve. The key to success is committing to the program and seeing it through. This will provide you a path to financial freedom and security.
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