Reasons To Consolidate

Stop Collection Calls
Lower Monthly Bills
Free Credit Counselors
Repair Your Credit
Get Out of Debt For Good
Foreclosure Facts
Loan Modification
Debt Elimination
Debt Settlement
Debt Negotiation
Personal Debt Freedom
Debt Management Plans
Debt Consolidation Guide
5 Steps To Debt Relief
Types of Debt Relief
Tips To Reduce Debt
Understanding Tax Debt
Payday Loan Relief
Debt Negotiation Letter
Debt Verification Letter
Credit Card Help
Credit Card Rules Changes
Store Credit Cards
Fix Credit Card Debt
Debt Consolidation Loans
How Debt Consolidation Affects Credit
Free Bill Consolidation?
Reduce Your Debt
The Debt Snowball
Financial Planners
Medical Debt Guide
Seniors in Debt
How to Keep Your Job
What if You Don't Pay Bills
Wage Garnishment
Mortgage Hardship Letter
Get Out of Debt
Bad Credit Personal Loan
Life After Bankruptcy

What is Debt Management?

The fuzzy term “debt management” can have several definitions. For the person who is missing credit card and loan payments, however, it can only mean one thing – a method by which the debt can be reduced and repaid with as little pain as possible. If this is your situation, don’t lose hope on debt settlement, the process by which you negotiate a realistic payment solution with each creditor or consolidate your debt in some manner to achieve manageable payments. If you are assertive and have the time, you can try this process yourself. If not, you can use the services of one of thousands of debt management organizations.

The Goals of Debt Management

The obvious overall goal is to get your debt payment down. Given this, the smaller goals are as follows:
  1. Stop the calls from creditors
  2. Lower your interest rates
  3. Eliminate late fees and over-the-limit charges
  4. Lower your total debt amount
  5. Secure a payment you can afford
  6. Build a realistic personal budget
Most creditors will not talk to you unless you are 60+ days behind in your debt. If you are not, however, you can still call and tell them that you are going to be experiencing trouble making the payments and ask what they can do to help you now. Some creditors will eliminate the additional fees and perhaps lower the interest rate, if they think this will keep you paying.

If you are over 60 days late, you can begin negotiations to lower interest rate, eliminate additional fees, negotiate lower monthly payments, and even lower the total debt amount. Creditors want some payment, always preferable to no payment or having to go to court.

Debt Management Services

Most people do not have the time and stamina to negotiate with a variety of creditors on their own. The option then is to use a debt management organization to do the work. The National Foundation for Credit Counseling can put a debtor in contact with organizations whose fees are reasonable and who have a solid reputation. Newer state laws have eliminated the huge fees formerly charged by unscrupulous firms, so you are in better shape now regarding fees. Usually, there is an enrollment fee and then a monthly fee for the period of management. Before you settle on one organization, however, be certain to ask what services will be provided. You want one that will handle all of the negotiations with your creditors, work to get fees, interest rates and overall debt amount reduced, and get you one monthly payment you can reasonably afford. As well, they should provide follow-up assistance, to help you establish an appropriate budget. With most of these organizations, you will make one monthly payment to them for all of your debt, and they will pass it on to your creditors. You will probably pay about $50 a month for this service.

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