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Five Benefits of a Debt Management Plan

Founded in 1951, the National Foundation for Credit Counseling is the largest serving nonprofit financial counseling organization. Find various topics in this blog, including personal finance, credit counseling, housing, budgeting and student loan help. Click here to speak with an NFCC-certified Consumer Credit Counselor.

It’s possible that you have severe debt. You got behind on your credit card payments for too long, and now you’re receiving constant calls from creditors.

One solution to your debt problems could be a debt management plan. A debt management plan is a way to pay down your debt through payments to your credit counseling agency, who will then distribute the funds to your creditors.

When you enroll in a debt management plan, it takes roughly 30-60 months to complete your payments. Your accounts will always be credited with 100 percent of the money you owe through your credit counseling agency.

Here are five benefits of enrolling in a debt management plan. If this is something you feel is right for you, contact an NFCC member agency today.

Simplify things by making just one payment

With a debt management plan, you will voluntarily deposit funds with your credit counseling agency, who will send the money to your creditors. Therefore, it’s just one simple payment for you and you don’t worry about having to make multiple payments to different creditors.

Many creditors will be able to help you out with lower interest rates

Most creditors will not stop interest charges. However, many of them will be able to get the interest lowered, making your payments easier and improving your finances.

Fewer collection calls

Tired of getting a bunch of random phone calls and messages from creditors? By signing up for a debt management plan, you may benefit from fewer collection calls. If credit collectors do call, you can ask them to contact the credit counseling agency that you’re working with.

Eliminate fees

Another thing your credit counselor may be able to do when you enroll in a debt management plan is negotiate to waive your penalties and fees that have added up due to late and missed payments. This will save you money and help get you on the right track quicker.

Freedom from debt

It will take roughly 30-60 months to repay debts with a debt management plan. However, you’re accounts will always be credited with 100 percent of the amount you’ve owed. A debt management plan will help you get over your debt and get you on the right path to improving both your credit and you’re financial well-being.

For a budget and credit counseling session to see if you may qualify for a debt management plan, contact one of our NFCC member agencies today! They are ready to help you reach financial freedom!

 

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