Debt management plans can be offered through various debt relief services and there are some credit counseling agencies that may advise consumers to consider one of these options so as to avoid to missed payments and damage to their credit score as a result of being in a situation where they cannot financially meet the minimum payments on all of their debt obligations. However, understanding these debt assistance programs and repayment plans that are available to consumers are necessary so that individuals in need of debt relief assistance can avoid scams or simply taking the wrong action for their personal situation.
Debt relief can be used as a vague term that could point consumers to either a nonprofit credit counseling organization, a debt management program, or there are some companies who will market a debt settlement plan as a simple debt relief service, but some of these plans could be detrimental for a consumer’s credit score while others may simply be unnecessary. Typically, consumers looking for debt relief services will turn to a credit counseling organization first since they simply give consumers advice on what financial practices and budgeting habits may be helpful in their personal life.
Yet, many of the problems associated with uncertainty related to various debt relief programs stem from the fact that certain consumers simply do not find a reputable counseling organization. There are options and resources to help consumers find a reputable credit counseling agency like the FTC, the Better Business Bureau, or even simply researching online, so finding an accredited agency that will work one-on-one with a consumer to address their particular issues should be a consumer’s top priority when seeking debt relief.
However, the FTC also warns against debt relief firms that promise unsecured debt can be paid off for mere pennies, ask for excessive fees and upfront payments, or advises that consumers stop making payments to creditors, as these actions could be a sign of a fraudulent organization and do more damage in the financial life of a consumer. Yet, when a reputable credit counseling organization is consulted, it could lead to more options being made available in the life of a consumer to help them find the debt relief they need.
When it comes to a debt management plan, though, this is usually a step that a consumer will take after seeking credit counseling or simply trying to budget in a way that allows them to meet their monthly payment obligations. In the spectrum of debt relief, debt management can be more serious than a simple credit counseling session, but is not as bad as debt settlement, where a consumer works out an agreement to pay creditors less than they originally owed.
Debt management is essentially an agreement between a consumer and their creditors, typically worked out by counseling agency, that allows for lower monthly payments to be met on certain obligations, through a credit counseling agency, but the total amount of debts will eventually be repaid. This can be more beneficial for a consumer if it is necessary, despite the fact that it could cause some to see a decrease in their credit score if factors like the closing of a credit card account is necessary to offer reduced payments, but there are some advisors who state that debt management can be seen in a positive light as consumers did not default or settle their debts for less than they owed.
While debt relief is something that is on the mind of many consumers at the present time, understanding the progression of these programs that are usually grouped under the heading “Debt Relief Services” will better allow consumers to weigh their options and find the best plan for erasing their debt obligations, but proper research must be done to find an accredited counseling agency that will work for a consumer’s best interest and help them overcome any setbacks that may result from plans like debt management if, again, they are necessary.