Outstanding debt is one of the most common problems faced by families today. More and more consumers are turning to credit rather than cash when making large purchases, and it often shows in their financial well-being. Even if you have made some mistakes in the past, a good debt management plan can put you on the road to financial freedom in very little time, and with minimal effort. There is no one-size-fits-all debt management plan out there, but by working with a professional, you’ll be assured that you’re doing everything in your power to ensure a healthy financial future for yourself and your family.
While debt management plans differ widely in the way that they handle consumer debt, all debt management plans have a few of the most important basics in common.
Debt management is primarily used to recover from unsecured debts and loans, especially those with payments on which you have fallen far behind.
Most debt management plans are informal, but for some lenders, having a written plan in place will help them understand that you’re serious about getting out of debt and paying them a fair price for the money that you owe them. Third-party debt management specialists can be invaluable in helping you negotiate with your creditors since they can be completely dispassionate and objective when reviewing the facts of each debt that you owe.
The debt management consultant will negotiate on your behalf and is typically able to build a repayment scheme that will allow you extra time to repay the money you owe while simultaneously reducing the amount that you owe in interest and penalties. This combination can go a long way in reducing your monthly payments and putting you on a steady track to making good on your financial obligations.
Before setting off on a course of action, consider the pros and cons of debt management plans.
There are many benefits to working with a professional debt management specialist and the process of working with a debt management specialist is usually straightforward and painless. You provide a list of the outstanding amounts that you owe each of your creditors, and the debt management specialist takes that information, uses it to contact each creditor, and works on negotiating the best settlement they can for you. Unlike debt consolidation, the debt management company will not lend you money to pay off your creditors; they are only there to ensure that you are getting the best deal possible on each debt that you owe. Some debt management solutions go a little further, arranging for you to write a single check each month to the debt management firm. They then distribute the payments to your creditors to ensure that your payments are made on time and at regular intervals.
The most important thing to consider is whether you are working with a reputable debt management firm, and also that you’re getting the best deal possible. Ideally, because your payments will be heading off to your creditors on time each month, your creditors will offer to freeze further interest payments. This will allow you to pay less in the long-term while still offering you the option of paying off your debt over a longer period of time. One significant downside to debt management plans is that your overall credit score will drop in the short term because you’ll be paying less each month and for a longer period of time. However, within just a few short months you will begin to have a regular payment history and your score will start to climb again. By the end of your debt repayment plan, it’s not unreasonable to think that your credit score will be much higher than when you began working with your specialist.
Regardless of what types of unsecured debts that you have, call us or fill out our online form so we can start working on your case as soon as possible. Every day that you wait is another day of interest and another day that you’re falling further behind in your financial obligations. Be a responsible consumer and start paying off your debts as soon as possible. Let us help you in any way that we can.