A debt management plan or program (DMP) is a process through which you can repay your debts at a lower interest rate. With the help of this plan, you can become debt free within 3-5 years.
Can you get online debt management help?
Yes. Online debt management help is available. However, make sure you read online reviews and check the credentials before you approach a debt management company.
When you should go for a DMP
Contact your creditors & request for interest rate reduction
The debt management company will contact your creditors and ask for a reduction in interest rate. It'll become easier for you to repay debts
Once you make the payment to the company, it will distribute the amount amongst your creditors as per the agreement.
The counseling agency or debt management company will offer a free counseling session. Through it, the counselor will provide you with suitable tips to manage the financial situation and repay debts.
Offer a debt management program
The company will offer a DMP if you cannot manage money all by yourself.
Steps to choose a debt management program
Try to manage your multiple bills yourself
Plan a budget, cut down unnecessary expenses, and use the money to repay your debts.
Search for a reliable credit counseling agency
If you can't manage your accounts on your own, you can take help of a credit counseling agency. Search for a licensed credit counseling agency in your state.
Take help of a credit counselor
Follow the budgeting tips to save money and repay debts, offered by the counselor.
If you can't manage your finances on your own even after following the budgeting tips, the counseling agency can offer you a debt management program.
Before you enroll, ask how many months it'll take to repay the outstanding balance in the multiple bills.
Ask how much you need to pay monthly
Make sure you can comfortably make the agreed upon monthly payment to the debt management company.
Ask on which date, payments will be disbursed to the creditors, so that you can track payments. You should get monthly statements with payment details
Know about the fees you need to pay
Ask how much you need to pay as professional fees for the debt management plan.
You should take help from a reliable organization so that your personal and financial information remain secure.
Get everything written in details
Before you enroll in the plan, make sure you get everything written down and go through it carefully.
You should enroll in the plan only if it suits you. You should be able to make the required monthly payment.
Do's and don't's of debt management