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Debt Management

Debt Management

Based on statistics from the Federal Reserve, American’s are currently in debt to the tune of almost $2 trillion. That comes out to a little more than $18,000 per home. If you are looking for a solution to pay of your debt sooner, read more about debt management below.

What Is A Debt Management Plan?

Debt management, also known as consumer credit counselling, is a program that has been put out, that is creditor sponsored and is known as a credit counselling service. Debt management is designed to help pay back your debts, where you are paying everything in full still with interest.  In this program all the debts are merged into one account so that you only have to make one payment a month instead of having your payments during the month.

It used to be that in a debt management plan, the credit card companies gave large concessions in the form of very low interest rates. Today unfortunately, credit card companies do not reduce the interest rates much on this type of program. Depending on where you are right now, you may actually see the interest rates go up.

Additionally, for anyone that gets paid weekly or bi-weekly it may be harder to pay one monthly payment while keeping current on the other monthly expenses they may have. If you miss a payment in a debt management plan, you may be booted out of the program and may not be able to re-apply for it again or for a significant period of time.

In a debt management plan, all credit cards will be canceled and the ability to take on new credit will not be possible until the program is complete. Also, creditors who are in the debt management plan will not offer more credit while you are in the program to pay off your current debts.

In many cases the payment will go up because the debt management company or credit counselling firm is charging you a monthly fee for their services. The reason for this is that credit card companies are not paying them as much as they used to manage this type of program and there is a lot of overhead associated with it.

How Does A Debt Management Plan Affect You?

Many lenders have informed CuraDebt that they regard a person who is in a debt management plan as if they were in a Chapter Bankruptcy because a third party is paying back the debt for the consumer. Each lender is going to look at a credit report differently. You must understand that in a debt management plan, it will show up on your credit report that a third party is paying back these programs and that you went to seek help.

Debt Management Today

The bottom line is that in a debt management plan there used to be many benefits. Today, in most cases the interest rates don’t go down much. The debt management company is charging a monthly fee. You have one big payment to make each month so it could be harder for you to pay. Your credit report shows that you are in the program. So the benefits in this type of program are not that great.

What Can You Do?

CuraDebt can help you to see if this type of program would be best for you. Speak with a CuraDebt counsellor, at no obligation, to go into more detail about your particular situation; your payments, your interest, the terms of the loan, and your current financial situation.

You may find that perhaps another type of program, designed to save you money and help pay your debts off sooner, would be better for you and your family.

Fill out the form here to get a free consultation or call, Toll Free on 1-877-850-3328, for your free consultation to see what the best option is for you.

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