Life on a Debt Management Program
Signing up for a debt management program is easy; it's a matter of finding
a company you feel comfortable with that is difficult. There should be no
pressure added from the company you speak with, joining a DMP is your
decision and you should feel like you are in a partnership with the
company, meaning you both have control over your financial situation.
Below you will find information on debt management programs and what they
offer.
First off, once you decide on a DMP your partnership will begin as soon as
the company receives a client agreement. The counselor you speak with will
become your personal counselor and they will send proposals to each of
your creditors outlining your new repayment plan. However, not all
creditors will process proposals immediately. It may take several weeks
before the creditor notifies the counselor that the proposal has been
accepted. Some creditors might request a higher payment than what was
proposed, which in that case the counselor will notify you immediately.
It's the first few months that are crucial to ensure success on a Debt
Management Program. You will find that some company's offer counseling
throughout the first steps of the process to make certain that the
proposals have been accepted and that you are receiving creditor benefits.
A great aspect about having a personal counselor is that you should be
able to:
* Change your payment method
* Notify them of creditors phone calls
* Report any errors on your statements
* Answers to all of your questions
If you want to earn special benefits like lower interest rates and waived
late fees you'll first need to be consistent with making your payments on
time. Most creditors will start granting benefits upon acceptance of your
proposals. However, some other creditors may take up to three consecutive
payments before offering full benefits. That's why it is important for you
to carefully review your monthly creditor statements such as when benefits
are granted to make sure they appear that month. You should also check
each month to make sure that you are receiving credit for your payments
made through the debt management company you chose to sign up with.
As most companies promise, the collection calls will stop. Yet, it may
take up to three consecutive payments from the credit counseling company,
before the calls stop completely. If a creditor happens to call, you
should inform them that you are working with a credit counseling company
to eliminate our debt. If they call again, notify your counselor and they
will contact that creditor for you.
One thing that is crucial is to not make any additional charges on your
credit cards once you have enrolled in a program. With most companies, if
you do incur new charges, you are at risk of jeopardizing your acceptance
into the program. Any additional charges could affect your payment
schedule and your monthly payment amount because it affects your balance
owed.
Usually credit-counseling companies will allow for you to pay several
different ways. Some forms of payment are E-pay systems, which offers a
convenient and secure way to make your payments. The payment is
automatically deducted from your checking or savings account on the
scheduled due date. This will ensure that your payment is received on
time, every time. Another option available is if you choose to send your
payment by cashier's check or money order. However it is important to send
your payments in early enough to allow enough time to get there.
If you decide to sign up for a dept management program you should receive
an estimate of the length of time it will take to complete your program.
You should also get a breakdown of all the debts you owe, the amount owed
to each creditor, the proposed payment to each creditor, and the
anticipated number of months needed to pay off the debt. As your program
continues, you should be able to contact a counselor to get an updated
version of your repayment schedule. This will provide you with goals to
shoot for each month as you see your debts decreasing.
So that's the process of a DMP, but one may still wonder, what's life like
on a DMP. Well, your money isn't locked up, and you aren't under house
arrest where you can't go out and have fun still. It's up to you to decide
how much money you need to set aside each month making sure you have
enough to cover your costs, as well as cover any other costs you may have.
To relieve stress, you should get out and do something you enjoy whether
it's simply going for a hike or hanging out with friends. There is plenty
to do while being on a debt management program, which no one will know
about unless you choose to tell them so because all your information is
kept strictly confidential.
For more information relating to debt management programs and other
financial assistance please visit http://www.inchargeorg.org.
Katie Spencer is a contributing writer for a number of international
financial journals both online and in print. Katie has been delivering
financial education to the public in a variety of areas to include
budgeting, credit and debt management, and money saving tips. Recently,
Katie has been in partnership with a national educational foundation to
deliver financial advice to American consumers via the web. For more
information and to read the latest articles published by Katie, please
visit http://www.inchargeorg.org
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