Once you have fallen into debt it’s like falling into a sea of overwhelming phone calls, letters and emails from debt collectors. Once these collectors have locked onto you they will relentlessly call you day and night in order to try to get you to pay up. These collectors are paid commission so they are motivated to get you to pay your dues or at least sign up for a payment plan.
The 2 Ways Out of Debt
Once you have acquired a large amount of debt it is difficult to get rid of. There are really only two ways to relieve yourself from the debt collectors which are unfortunately, either pay off the debt, or file bankruptcy which you probably want to avoid. However, bankruptcy tends to be a popular option, in fact, a 12 year study ended in September of last year which should over 1.2 million people filed for bankruptcy. However, this seems to be an unethical way of doing things. As those who filed did not handle their debt responsibly and basically cheated their creditors out of money.
A Debt Management Plan
If you wish to go about handling your debt responsibly and taking the ethical route, you will want to establish a debt management plan. You could create a debt management plan yourself and try to negotiate and deal with your creditors, or, you could hire a consumer credit agency in order to assist you in handling your debt management plan. Consumer Debt Agencies are not that difficult to find and usually every city or town has at least 1 or 2. However, if you happen to not be able to find an agency near you, you can find one on the internet. Just be careful that you don’t run into a fraud scheme, as there are many on-line. Before you decide to do business with these companies, research them and make sure they have good ratings and are accredited by the Better Business Bureau.
If you use a credit counseling agency you will consolidate your debts in no time. You will be provided with a personal counselor who will look-over and review your financial records. Your counselor will then contact your credit companies and negotiate for lower payments and interest rates. Once this is successfully completed by your counselor and all your credit agencies have agreed to your payment plan your debts will be consolidated into one easy payment that you will issue directly to your Consumer Credit Counseling Agency who will then use the money responsibly in your debt management plan.
The Upside of a Debt Management Plan
One of the best upsides of having a debt management plan is that once your bills have been consolidated your over all monthly bills will be reduced from what you were previously paying out. Once your payments have been sent into a payment plan, you will no longer have to search through numerous papers and bills and risk missing a payment resulting in another late fee. With debt consolidation, you will have one quick and easy payment per month, until your payment plan is completed.
The Downside of a Debt Management Plan
Although there is a big upside of the reduction of monthly bills and the headache of sorting them out, there is still one downside to having a debt management plan and that is the fact that the average plan runs for approximately 5 years. In order for your plan to work out successfully you will have to manage your money more efficiently and stick to a long term budget. Once you have acquired a debt management plan, it is very important that you keep up with your monthly payments. It is likely for them to drop your plan if you miss payments and then it is very difficult to get the payment plans back. This will then put you in a much worse state than you were previously in. So, when dealing with a debt management plan make sure you have the proper amount of money each month to completely pay it. You don’t want to make your financial burdens worse.
Rather than using a debt management plan many Americans are choosing to use a debt settlement. There are many reasons this is a more popular form of clearing debt and it is much more realistic and ethic than filing for bankruptcy. It costs less than Consumer Credit Counseling Agencies and other forms of debt consolidation loans. Thousands of families have already been helped by using debt settlement plans and maybe you could too.
It is no secret that the U.S. economy is in a type of financial crisis, although we are still a first world Country, we are losing jobs and falling further into debt more and more each day.