Consumer Debt Management Programs–How They May Help Erase Debts And How Long It Takes To Pay Off Debt

Consumer debt management programs are one step in the line of erasing debts when consumers are having difficulties repaying these obligations. Typically, consumers can consult directly with their lenders, talk to a credit counselor, or simply formulate a budget that will allow them to get back on the right financial track, but if these opportunities do not provide the solutions that a particular individual needs, a debt management plan can be helpful for those who are suffering from financial distress in relation to their ability to meet debt repayments.

While consumers who feel a debt management program may be their best bet or are advised by a credit counselor to participate in a debt management program can be helped, they must make sure that they find a reputable organization or debt management company as there can be problems related to debt management.  However, if properly executed, debt management may have no adverse affects on a consumer’s credit score and can also offer the debt relief they need.

Essentially, problems which have arisen for consumers in debt management programs lie with counseling agencies or debt management program, in that some consumers may make their agreed-upon payment to a debt management company who may delay these payments to various creditors, which would obviously be considered as a late payment or, in some cases, fraudulent organizations may take out fees and, in the long run, end up costing a consumer much more or put them in the position where they cannot even afford debt management costs.

However, consumers who participate in a reputable debt management program and have creditors who will agree to this debt management plan without closing any accounts, which may lower a consumer’s score, may find that they can have their debts repaid through this program without running the risk of defaulting due to their inability to make these payments. A debt management program will usually talk with lenders and set up a repayment plan that is within the financial means of a consumer, so this can not only put an individual on the path to erasing their debts, but at an expense that is well within their ability to repay.

Yet, depending on the severity of a consumer’s debt situation, the length of time that a consumer will be in a debt management program could vary between 36 to 60 months, according to the National Foundation for Credit Counseling. While, again, there are some debt management programs that will not particularly hurt a consumer’s credit score, there are also aspects of reputable debt management programs that, if a consumer’s score does drop during the debt management program, they can help them reestablish their credit and help put them on a more solid financial ground, in terms of money management.

Consumers who are proactive about dealing with their debts may, again, benefit from simple credit counseling and budgeting, but if one of these individuals has simply gotten into a situation where restructuring their finances does not help, these debt management plans can be beneficial. Yet, to avoid any ill long-term effects of a debt management program, consumers must, again, look for a reputable organization that will implement this plan, as debt management can be helpful to a consumer in a bad financial position if further action needs to be taken beyond credit counseling.