19 NovOrganize Your Debts With Debt Management Plans
Over the years, the financial market has evolved many folds. With financial liberation, the worldwide phenomenon of payment on credit was introduced and now almost everything we own is bought on credit. To know about them in detail, Click here. As per a story covered by www.theguardian.com, cases of defaulting and bankruptcy have drastically increased in the past few years. In fact, some of these scams have practically shaken the economy of the countries as a whole. In a way, this practice has minimized mental stress and financial burden, but if not managed intelligently, it can lead you into serious financial and legal trouble. There are multiple debt arrangements which individuals or businesses can opt for either for growth, expansion or personal commitments.
In case you are caught in deep debt and are unable to get out of it, debt management plans are there to guide and protect you from any further legal implications and settlements. A debt management plan is the advisory service offered by credit counselling agencies who coach you in coordinating and negotiating with your creditor on the terms for the repayment of debt in best possible way.
The process involves you and your credit counsellor reviewing your current financial status and taking a call to go ahead with a debt management plan. Next, the counselor, as your representative, will negotiate with the creditor for a reduction in the current interest rate or relaxation on the pending amount due. Once the terms are finalized, you can deposit the required funds in a credit counseling agency account. These funds are then they distribute the shares to your respective creditors against various unsecured loans and other liabilities.
Debt management plans are primarily used for managing certain types of debt like credit cards and unsecured loans such as personal loans. A few other liabilities which cannot be paid via debt management include house mortgages, vehicle loans, student loans and home equity loans.
The specific advantages of debt management plan include:
• You get rid of the liaising and coordination process with your creditors. Since the delayed payment may agitate the creditor, you are saved from facing the anger and stress. This all is taken care by a third-party counsellor. They professionally tackle the negotiation process.
• These arrangements are flexible; you can terminate the process whenever you feel like it.
• In case you have financial hiccups to pay your regular loans, DPM gives you the option to pay on a monthly basis instead of single one-time payment.
To figure out whether debt management planning is suitable for you, ask yourself these questions:
• Are you unable to apply for any additional debt because your credit rating is not good?
• Is the pending value more than 5000$?
• Are the number of unsecured loans high?
• Would you be able to pay back the pending debt in full? If so, what are the extended timelines?
Debt management plans can literally save lives from being torn apart and the turmoil of property seizure. With DMP helping you clearing off debt, your financial burdens are reduced to some level.