You may be able to create your debt management plan yourself. By looking into your expenses and income, you can establish a workable budget. However, creating and following a budget can be difficult, especially if you are new to fiscal organization.
A professional credit counselor can help make paying your debt more manageable. In addition to creating a budget, a counselor may be able to do the heavy lifting for you. He or she may contact your creditors about:
- Reducing your interest rates.
- Reducing your monthly payment.
- Eliminating late and other fees.
- Debt forgiveness in exchange for a lump sum.
Your credit counselor may work out a payment plan with your creditors.
Most payment plans can take three to six years to pay, and creditors will likely want automatic payments set up.
Certain debts are not open for negotiations. Credit agencies will not be able to reduce student loans, home loans, tax obligations, and car loans. However, a representative can still work with you to develop a financial plan to handle these debts.
The financial advisor may recommend combining all of your debt into one debt account. For instance, rather than paying the minimum requirement on several credit cards, a single loan could cover all of your debt and reduce your number of monthly payments to one.
If you default on the debt management plan, you may undo it completely. Creditors may only relieve a portion of your debt if you continue to make on-time payments. A missed or late payment could mean getting all waived fees back.
By Admin –
