Digging yourself out of debt may seem like a nightmare, but the process can be straightforward when you have a detailed plan and follow it to the letter. One of the best ways to navigate the maze of tricks and dead-ends is to consider a debt management plan. Debt management plans are offered by a number of different credit consolidation companies and can help you gain control over skyrocketing interest payments and a financial situation that has gone off-course.
How Debt Management Plans Work
Debt management plans typically are ran by non-profit credit consolidation companies, who earn their revenues by negotiating with debt collectors over your debt; the end result still leaves you typically paying less (directly to the debt management company) than you would be paying under normal circumstances. Another big advantage to using a debt management plan is the ease of mailing just one monthly check. The consolidation company takes care of the rest.
Who Benefits from Debt Management Plans
First of all, seeking help in the form of a debt management is a big admission and you can be proud of yourself for doing so. Typically, you want to cease accruing any more debt before getting your finances in order. This means getting rid of unnecessary credit cards and using necessary ones ONLY when it’s necessary. One you have worked with a credit company to consolidate and lower your debts and monthly payments, the last thing you want to do is to begin the cycle anew.
What I Can Expect from Debt Management
Most people notice the effects of debt management plans immediately. In the vast majority of circumstances, you will see a 10-50% decrease in the amount you are paying in debt each month, depending on your current interest rates and forms of debt. Debt consolidation companies negotiate with debt collectors to reduce both your principal balance and your interest rate, which leads to a quicker payoff for you.