Personal Debt Management After Credit Counseling–Steps Consumers Take To Avoid Delinquency And Settlement

Personal debt management assistance through a debt management plan is usually the following step a consumer takes after they have consulted a credit counselor to see if there are budgetary methods that can be implemented that will allow them to better combat various debts in their life. Typically, a consumer will be advised to seek out a debt management program if their current financial situation does not allow for these simple financial steps to begin repaying their debts with their current income, as debt management will essentially offer more affordability to a consumer through agreements worked out with creditors, typically through either a credit counseling agency or a certified debt management program.

While there are numerous individuals who may consult a credit counselor, many find that they can avoid debt management and even debt settlement if they are in a decent financial position and address issues early, but for those who must seek out a debt management plan, there are steps that must be taken so that this plan will be implemented in a cost-efficient way that will help a consumer avoid missed payments or the need for a debt settlement plan.

Debt management can show up on a consumer’s credit report and, in some cases, could decrease an individual’s credit score, but these decreases in a consumer’s score are usually because they have chosen a poor debt management company or their creditors write-off certain debts in order to offer them more affordability on their monthly payment. However, these decreases are usually small when compared to either missing payments consistently, falling into delinquency, or settling debt at less than the original amount owed.

However, when it comes to choosing a debt management program, consumers must do a proper amount of research and, according to the FTC, it’s important to, “Make regular, timely payments. Always read your monthly statements promptly to make sure your creditors are getting paid according to your plan. Contact the organization responsible for your DMP if you will be unable to make a scheduled payment or if you discover that creditors are not being paid.” While consumers and should keep tabs on where their money is going in relation to the debt management plan they have worked out, properly researching these programs will usually lead to an accredited organization that has not only a good track record and certifications, but should offer evidence, like customer testimonials, that show they are helpful with debt relief.

Obviously, consumers can simply run a Google search, consult the Better Business Bureau, or interview various counseling programs and debt management companies to seek out the most qualified, but keeping track of how a debt management program is using a consumer’s payments will also be vital. If all goes well, a debt management program can help a consumer avoid missing payments while still paying the entirety of there debt obligations and even if damage to a consumer’s credit score is done, in most cases it can either be easily repaired or this organization will help the consumer get back on their feet financially.