Top 7 Things you should know about Debt Management Programs
Unfortunate life events can happen at any time to make it difficult to keep up with loans, a home mortgage, and credit card payments. Filing for bankruptcy, having property repossessed, or having utilities shut off is a dire situation that no one deserves.
A debt management program provides the opportunity to combine all monthly bills into one reasonable payment. Rather than fall behind with numerous lenders and risk losing valuable assets, an agency will negotiate a plan that suits your budget. This is the easiest way to avoid ruining your credit score or having to file bankruptcy in the effort to regain financial stability. Before deciding if it’s the best solution for your situation, there are a few important things every person should know before entering a program.
- You Will Only Owe One Monthly Payment
Consolidating multiple accounts into one single payment allows the agency to distribute payments for you. As long as you can commit to making this payment in-full and on time, then the debt can eventually resolve itself.
- You Can Get Fees Waived
Avoiding high late fees is one way to make sure that every payment actually goes toward paying back the debt. Working with a company to negotiate waived fees saves an average of $40 a month per creditor in the agreement.
- Your Debt Will Gradually Fix Itself
As long as you do not miss a single payment, you do not have to continue worrying over the debt increasing. Although the process of only paying minimum is slow, you will be taking steps toward regaining financial stability.
- It Takes Time To Take Effect
Hiring a company to combine your payments does not mean that you’re immediately off the hook. Expect to make at least one more regular payment to the individual lenders to avoid taking on a penalty for missing the due date.
- You Retain The Option to File Bankruptcy
Working with a credit counselor is one of the final steps before declaring absolute bankruptcy. You still have the option of filing bankruptcy if it does come to a point that you’re unable to maintain debt management payments.
- You Can Save Money Doing It Yourself
Contacting and negotiating with every single lender takes time, but that’s the exact process a debt management agency will go through for you. Although they’re not the easiest conversations to have, it can help you avoid paying the fees of another company.
- Nonprofit Status is Only A Gimmick
Speaking of paying fees, there is no such thing as a non-profit debt management business. The monthly fees are typically modest, but do not be fooled thinking they are not going to make their money.
If you’re in a situation that a debt management program could help you, give us a call at 1-866-964-6529 to receive our professional advice.