Credit Card Debt Management - How Does a Legitimate Debt Management Program Work?

Feb 15
08:19

2010

Matt Couch

Matt Couch

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Patience is a virtue. There are several debt relief agents in the market who propose to debt reduction techniques. Too much of information can be misl...

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Patience is a virtue. There are several debt relief agents in the market who propose to debt reduction techniques. Too much of information can be misleading at times,Credit Card Debt Management - How Does a Legitimate Debt Management Program Work? Articles so it is important to find the right service and the rightful method to handle the debt issues. Credit card debt, personal loan, medical loan are typically classified as unsecured debt, they have a high risk and in turn a high APR associated. The impact of high APR is felt more when you do not have a continuous source of income to repay the debt.

The credit counselor helps you provide information through a process, free of cost. The debt management program is not for everyone, credit counselors suggest a debt management program for those who are unable to maximize the debt relief based on advice alone. Most of these agencies are non profit or government based organizations. Their basically intend to pull you out of debt in a legitimate way, taking a shortcut to get rid off debt might be damaging to your credit score in the long run. You have a choice, either to damage your credit card score for 5-7 years or to pay off the credit card debt over this period in an organized and affordable way. I believe most of you would go with the second choice, let me explain, how does this work.

A legitimate credit counseling agency would spend sufficient time with you to understand your assets, the shortages, debt issues, budget planned and other monetary aspects. Based on complete assessments of these factors they tailor a program for each individual. If you are willing to join the program after a satisfactory discussion, they initiate a negotiation with your lenders.

There is an effort to reduce the interest rate and eliminate late fees and over limit charges to make the payment affordable for you. They advice you on improved, realistic budget planning and consolidate your credit card bills into a single manageable payment. Referring a debt management program in time helps you avoid the harassing calls for collection and maintain the credit score. Hurrying into debt settlement not only invites collection calls but ruins your credit score for at least 6-7 years.

Normally a paid Debt management program comprises of 15 % of your payment. This means, if you are paying $100 every month to settle your credit card debt, $15 goes to the DMP. This plan includes the creditors consent and sign off, so all that you pay to the DMP, in turn is channelized to different credit card companies.

Finding legitimate debt settlement companies is not that difficult but consumers must know where to look. It would be wise to utilize a debt relief network that will qualify the companies for you and ensure that they are legitimate and have proven themselves. To locate the top performing debt settlement companies in your state check out the following link:

Free Debt Advice(http://www.freedebtsettlementsolutions.com/)