Of all the programs out there, do you think it is worth it to use debt management services? This is one of the debt consolidation strategies that will involve the help of a professional. Obviously, that would mean you will have to pay a certain fee to get help. While most debt management programs are from non-profit credit counseling organizations, it will still require you to pay a minimal fee that will not go higher than $50 a month. This seems like a small amount to get debt help. However, if you are struggling to keep up with payments, this might be too much to spend.
But then again, if you really need help with debt relief, this is a really small price to pay if it means you will be successful at achieving debt freedom.
Surprisingly, there are many people who fail to realize the benefits of using debt management services. According to reports, more than half of Americans with credit card debt have used a form of debt relief to help with their credit issues. Of this group, only 15% considered to use debt management. Based on the report, it is believed that people do not use it for a lack of understanding of what this debt solution can bring.
Is it worth it to get debt management services?
Before you can answer this question, you need to get to know your financial situation first. All debt relief programs are effective. However, you need to find the right program that suits your financial capabilities. If it suits your current financial position, then getting debt management services will be worth it.
Here are the various signs that will indicate that debt management is the right credit solution.
If you do not have the time to manage your debts
Sometimes, debt becomes really stressful because you simply do not have the time to manage it yourself. If you are too busy with your work and personal life, you need to have someone help you out. Otherwise, you will start missing out on payments. If this happens to your credit card debts, the high-interest rates and the late penalty charges can quickly increase your balance.
AARP shares that about 36% of people are unable to pay their bills on time. This is one of the outcomes when you cannot manage your payments on your own. This is why it is better for you to get the help of someone who can help manage your debt.
If you have enough financial resources to pay off debt
One of the conditions of a debt management service is that you need to be able to meet your payments on your own. If your income is not sufficient to pay for all your debt accounts, you need a debt reduction. It is either you use another debt solution or you find a way to increase your income. You can look for ways to increase your income or even lower down your expenses to help you meet your payments.
While the credit counselor providing the debt management services makes the process less stressful, you still have to finance the debt payments. You still have to provide the monthly payments. The counselor will just help send your payments to your creditors and lenders.
If you need guidance to succeed in debt relief
Some people may not have problems with their finances but they are still not prepared to pay off their debts on their own. It can either be caused by their lack of knowledge for debt solution or their inability to control their spending urges.
Taking on some debt management services can help you find your way with much-needed guidance. Financial experts can alert you on debt consolidation red flags and other debt repayment truths you need to know before you make a decision. They can immediately spot opportunities that can help make debt freedom easier to achieve.
Benefits of using a debt management plan
There are a lot of benefits if you decide to use debt management as your way out of debt. Here are three that are the most important advantages.
Fixed monthly payment
Paying off multiple debts can be quite stressful. And if most of them are credit card debts, you can expect it to be even harder. After all, the monthly payments for credit card debt vary each billing cycle. This makes it hard to budget and prepare for the payments. When you use debt management services, the credit counselor will create a DMP or debt management plan. All the debts in this plan will be frozen – meaning you cannot add any more debt to it even if that includes credit cards. The credit counselor will calculate a monthly amount that you can afford. This will be the fixed amount that you will pay each month. The DMP will be sent to your creditors and lenders for approval.
Once approved, you have to send the monthly payment to the counselor and they will be the one to send the money to your respective creditors and lenders. You just have to focus on that one fixed payment.
No need to borrow money
Another benefit of debt management is you are no longer required to borrow money or open a new credit account to consolidate your debts. There is no need for a good credit score. The credit counselor will take charge of consolidating your payments through the debt management plan. All you have to do is to meet your total monthly due and your multiple credit accounts will be paid off. As you continue to pay your debts, your credit score will continue to rise and improve.
Finally, debt management is beneficial because it will help lower the stress that you feel about your finances. If it is causing tension within the household, having this debt solution can help make all of that better. In case it is causing problems between you and your spouse, consolidating your debts correctly can save your marriage. Someone reliable and experienced with debt is handling your credit accounts. You should feel at ease because someone is making sure that your debts are paid – as long as you provide the funds. This arrangement will help you focus your efforts on what matters most – living your life and improving your financial situation.