Benefits of a Debt Management Plan
It is hardly surprising that the demand for Debt Management Plans is set to rise.
Millions of Americans have over-borrowed.
Now that better paid job opportunities, bonuses and over-time are in short supply, consumers are struggling to make repayment at the rate specified in their credit agreements.
Unemployment now stands at 9.
7% - a 27 year high - and appears set to continue rising until 2011, if the remarks of Nobel Prize-winning economist Paul Krugman are to be believed.
The number of people having to take a cash advance from their credit card to make repayments on existing forms of borrowing is really quite staggering.
Not surprisingly, it is an unsustainable strategy that only serves to exacerbate money worries in the long run.
Greater Affordability with a Debt Management Plan Consumers who don't earn a sufficient sum of money to make repayments on unsecured loans, unpaid credit card debt and past-due medical bills can benefit greatly from a Debt Management Plan.
An advisor will perform a full and comprehensive assessment of your income and expenditure in order to determine what you can realistically afford to offer to creditors each month.
Simplified Family Finances Rather than making payment to multiple creditors, a single payment is sent to an intermediary.
After they receive their fee (normally 15% of each monthly payment), the remainder is distributed to creditors on a pro rata basis.
As long as you make this payment, there is nothing else to concern yourself with.
No More Interest and Charges Whilst they are not legally obliged to do so, the majority of creditors are prepared to freeze further interest payments and charges.
This would not be the case for a delinquent account.
Creditors realize that the debt is unsecured; a Debt Management Plan represents a better alternative for them than bankruptcy.
Creditor Contact Once you enter a Debt Management Plan, any creditor contact is far less likely.
Whilst they will want to assess your ability to contribute more each month, this is all taken care of by the intermediary as part of the monthly fee.
This means no more creditor contact.
There is no debt write-off so a Debt Management Plan will continue until any money owed is fully cleared.
The agreement is not legally binding so you are free to change your repayment strategy in the future.
It is important to always consult a qualified credit counselor before proceeding with any debt solution.
Millions of Americans have over-borrowed.
Now that better paid job opportunities, bonuses and over-time are in short supply, consumers are struggling to make repayment at the rate specified in their credit agreements.
Unemployment now stands at 9.
7% - a 27 year high - and appears set to continue rising until 2011, if the remarks of Nobel Prize-winning economist Paul Krugman are to be believed.
The number of people having to take a cash advance from their credit card to make repayments on existing forms of borrowing is really quite staggering.
Not surprisingly, it is an unsustainable strategy that only serves to exacerbate money worries in the long run.
Greater Affordability with a Debt Management Plan Consumers who don't earn a sufficient sum of money to make repayments on unsecured loans, unpaid credit card debt and past-due medical bills can benefit greatly from a Debt Management Plan.
An advisor will perform a full and comprehensive assessment of your income and expenditure in order to determine what you can realistically afford to offer to creditors each month.
Simplified Family Finances Rather than making payment to multiple creditors, a single payment is sent to an intermediary.
After they receive their fee (normally 15% of each monthly payment), the remainder is distributed to creditors on a pro rata basis.
As long as you make this payment, there is nothing else to concern yourself with.
No More Interest and Charges Whilst they are not legally obliged to do so, the majority of creditors are prepared to freeze further interest payments and charges.
This would not be the case for a delinquent account.
Creditors realize that the debt is unsecured; a Debt Management Plan represents a better alternative for them than bankruptcy.
Creditor Contact Once you enter a Debt Management Plan, any creditor contact is far less likely.
Whilst they will want to assess your ability to contribute more each month, this is all taken care of by the intermediary as part of the monthly fee.
This means no more creditor contact.
There is no debt write-off so a Debt Management Plan will continue until any money owed is fully cleared.
The agreement is not legally binding so you are free to change your repayment strategy in the future.
It is important to always consult a qualified credit counselor before proceeding with any debt solution.
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