Many people let debt pile up and don’t get aggressive about getting debt free. But there are various debt help options that are now available that can help you with your debt management. If you have multiple debts across a few credit cards, you can always consolidate them with a consolidation loan or a balance transfer to a lower rate credit card. If you want to get the creditors off your back without filing for bankruptcy, you can negotiate with your creditors or even hire the services of a credit counselor or debt settlement firm who will negotiate with your creditors and help you establish a payment plan. A carefully designed debt management approach can help you establish a plan, evaluate your options that can range from debt consolidation loans to credit counseling to debt resolution and get yourself debt free and back on solid financial footing.

It is possible that even after you establish a strict home budget, you just can’t seem to put a dent in your debt. Maybe your monthly income just isn’t large enough to cover your expenses. Typically, this is when you might want to seek third party help for your credit debt management from a debt help provider such as a debt management firm or a credit counselor. With their help you may be able to negotiate lower interest rates on your credit card, get late fees waived, work out a payment schedule that’s acceptable to you and to your creditors, and consolidate your monthly payments into one.

Another option that you may like to consider for your bills debt management is to take the services offered by Consumer Credit Counseling Services, or CCCS. CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would negotiate with your creditors and arrange a new payment amount, usually based on a reduced interest rate. You would then need to make a single monthly payment to the CCCS which would distribute the funds to your creditors, based on the new payment amounts. A well planned CCCS plan may be able to prevent your accounts from becoming delinquent without causing any adverse effect on your credit score.

While you may like to go for the services offered by CCCS, you may also like to consider its drawbacks. First, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, your debt management plan may take around five years to pay off your debts, so you would need to be willing and able to commit to a long-term repayment plan. Third, your plan may have a negative impact on your ability to obtain a loan in future. Even though CCCS programs do not generally affect your credit score, many lenders when making lending decisions, view consumers who have enrolled in a CCCS program as customers with enhanced credit risks. Therefore, you may not wish to enter into a DMP if you are planning to refinance your home in the near future.

While there are various debt relief options available, it is advisable that you know your financial goals and your particular financial situation before making your choice. Any debt relief option, be it CCCS, Debt Settlement, or even bankruptcy, may have a negative impact on your ability to get a loan in future and therefore, it is advisable that it should be used as a last resort.

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Category: Finances
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