We know that individuals often feel overwhelmed when they come to a point in life where they must ask for help from a debt management specialist. Without some specific guidelines to assist them along the way, many may make poor decisions and, in the long run, only compound their original financial problems. But what is debt management, and what does it really involve?
Debt Management, defined simply, is a process by which debt is eased and eventually reduced through the managing of consumer assets and direct negotiation with creditors. Debt management is usually offered by qualified debt "counselors" or a certified debt management company. These debt management companies use what are called "Debt Management Plans (DMPs)" by which consumers deposit set funds each month into specific accounts that are then used by the debt management company to pay off consumer credit card bills, student loans, medical bills or any other form of unsecured debt. One of the myths of Debt Management is that it can hurt your credit. Well this is only true if you are behind on payments otherwise your payments are being made on time every month.
Step 1:Submit your information for a free consultation. We will assess your financial situation and determine your potential for debt management.
Step 2: We will work with you to determine the appropriate monthly dollar amount that you plan to save towards a negotiated settlement. This amount is typically very similar to your current minimum payments or they could be more depending on how short or long the term is, and goes toward paying off your debt (not simply paying credit card interest charges). These funds will be disbursed every month to your creditors.
Step 3: Once you enroll in the Debt Management Program, all of your creditors will be contacted and the program will be initiated. At this point, we will already have your readjusted interest rates from this program and will know all detailed information.
Step 4: We will set you up on a Automatic Withdrawal from your current checking account. On the day that you specify every month, we will debit this amount and pay your creditors.
Step 5: After the account is paid, we request that your creditors report to the credit rating bureaus that your accounts are “paid in full with a zero balance”. Congratulations, you are now debt free!!