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Debt Management Program

A debt management program is meant for consumers who have a steady and stable income but their financial budgeting is no longer working, and they aren't able to bring down their debt due to making only minimum payments to their creditors.

The Importance of Legitimate Hardship

A debt management plan is an option not only when simple budgeting stops working but for those whose finances have been effected by uncontrollable circumstances such as job loss, medical problems or divorce.

The Importance of Recent Account Activity

When a debt management program specialist and creditors analyze your financial situation, they will make an evaluation based on many things they see in your accounts. They'll look at the information about your interest rates, the minimum you are supposed to be paying, and the total amount due into consideration. They will also look at how you've been spending money. For instance, if they see you've curtailed your spending to necessities rather than buying a computer or television or large amounts of clothing, they will be more willing to work with helping you manage your debt.

If your credit history doesn't reflect a bankruptcy or historically bad credit, creditors will be more likely to work with you to reduce your interest rates and your payments. Debt management means that the creditors look at your situation as one that can still be managed.
While in a debt management plan, your credit report will reflect that you are making payments through credit counseling or a debt management company. Your credit score isn't hurt by debt management but there will be a notation that you are using it to repay debts. The notation will have negative effects when applying for credit because creditors will see that you had trouble with your finances before and thus will be less likely to approve you for a line of credit or a loan.

Debt settlement, on the other hand, does not show on your credit report and allows you to pay down your balances at a reduced amount (usually a fraction of the total) while the interest rates are eliminated completely.

Debt Free Counselor provides free consultations for consumers experiencing medical or financial hardship and are overwhelmed by credit cards, personal loans, medical bills, collection accounts, or other unsecured debts. You can fill out our application page and be contacted by one of our debt counselors or you can call now to be connected immediately

(877) 479 4545