Streamlining credits is the aim of debt management plan for providing relief to creditors
Millions of Americans feel the heat of debts that keep on growing without any signs of slowing down. If you belong to this group, it is natural that you must be looking for some remedies that could provide relief from debt. The problem starts when you have to deal with several creditors and make payments on many different dates of the month by checking individual bills. Since you gave borrowed money at different times for different amounts and varying interest rates, keeping a tab on all the accounts, verifying it regularly for correctness and then making payments on specific dates can become a harrowing task. This is the time when you are likely to miss payment dates and feel the heat of debt collectors breathing on your neck.
The negativity of bankruptcy
When you find yourself in such condition, you can choose from two options. The first one is taking the desperate measure of declaring bankruptcy. Many Americans often choose this path to wipe out debts. Although bankruptcy allows you to make a fresh start, it comes with a lot of baggage that does not always hold good for a credible financial future. The primary concern about bankruptcy is the ethical stigma attached to it. When you declare bankruptcy, it is a sign that you have acted irresponsibly in handling credits and have proved yourself unreliable to creditors. Once you file for bankruptcy, your credit score tumbles, and you find it very difficult to take up the task of financial reconstruction.
Create a debt management plan
Since you are ready to continue with debts responsibly, you should try to gain the confidence of creditors `by showing your willingness to pay back debts efficiently. For the purpose, you should create a debt management plan by negotiating with creditors. You can do it personally or take help from a credit-counseling agency for consumers. However, you should be careful in selecting the credit-counseling company because there are many scamsters in the field and you should do proper evaluation during selection. The choice that you have in managing debts is to think about debt settlement or some other ways of consolidating debts to make it manageable.
Consolidating debts is part of the debt management plan
When you engage a credit-counseling agency, it becomes their responsibility to handle your debts. By taking into consideration your financial position, the credit counselor will develop a debt management plan that is acceptable to you and then negotiate with the creditors. The prime objective of the plan is to reduce the interest on the balance payable and make the creditors agree to it. If the creditors accept the plan, you find relief because the credit-counseling agency deals with the creditors. You have to make monthly payments to the company for extending the service. It is a form of consolidation because you deal with the agency only instead of several creditors.
The debt management plan takes at least five years to ease out the debts, and you should be prepared to bear with it.
Thank you,
Glenda, Charlie and David Cates
