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A Comprehensive Guide to Debt Management Program

By Ruth Racey
Published: Friday, November 29th, 2013

Are you stuck amidst a huge financial debt? Effective debt management program empowers you to consolidate all your debts into one single low monthly payment, thus, freeing you of your worries. However, not only you are relieved of your stress, but you can also save huge money on fees and rate of interest too. Typically, a debt management program involves unsecured dent such as credit card bills, unsecured loans, line of credit, or any other form of loan that does not require collateral.

An expert credit counselor will have a close look to your situation, likewise, developing a realistic debt management program that is based on your income and ability to pay. Next, the counselor will work with your creditors to consolidate all your debts into one single, low monthly payment, with easier rates of interest. Hence, debt management is also known as debt consolidation or restructuring debt. If you are stuck in the dark dungeons of debt, unable to find a way out, such consolidation programs can be most effective for you.

How a Debt Management Program Works

Effective debt management and consolidation can be the best answer for all your debt related problems and worries. You will have a highly qualified and experienced credit counselor working with you, making it exceptionally easier to manage the process. Here’s how a debt management program works:

  • The credit counselor will look into all your debts, your monthly income, and repayment capacity, determining precisely where you are standing
  • Develop a realistic debt management program that is line with your income and payment capacity
  • Negotiate with the creditors to agree upon a consolidated amount; a lower monthly payment
  • Simple and hassle-free monthly fund transfers by debit card, money order, or Internet banking
  • Placing your funds in an insured and secure trust account
  • Automatic, timely payments to creditors, with full tracking to avoid delays and non-payments

However, debt management and consolidation isn’t what you should completely cater to. At the same time, you should be realistic about your income and learn effective money management skills that will reap the profits for a lifetime. Here are some important tips for you:

  • Build a realistic monthly budget and adhere to it strictly
  • Your budget should include the important expenses and liabilities first, and then items of lavishness
  • Monitor and control your spending
  • Regularly pay your monthly debt that has been consolidated
  • Set financial goals that you can achieve

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