Should
you consider debt management services? These services can put the
financially overburdened on the track to debt freedom.
If you are having trouble paying your bills on time,
take help of debt management services.
Your ability to pay your bills consistently by their
due date is critical to recovering your credit standing. Here's
how to tell if debt management services is something you need to
consider.
You must know where your money is going. Write down
the exact details of your income and expenses for two months. Now
add up all your debts and total the minimum payments due on each.
Financial planners say if you can afford to pay double
the amount of all your minimum payments each month and still put
away at least 10 percent of your income in a savings fund for emergencies,
you just need a disciplined spending plan so you can accelerate
paying off debts. Can you get a cheaper cell phone plan or make
do with basic cable? If its possible then do it!
You'd also be surprised at how much you can trim from
your monthly out-of-pocket expenses by making a weekly shopping
list for groceries and personal-care items and sticking to it. Avoid
using credit cards and refrain from unscheduled trips to the ATM.
Call each creditor with whom you've been delinquent and ask to work
out a payment plan, and again, stick to the plan.
Several of the following factors combined can signify
that you need professional help:
1. Your voice mail is filled with messages from debt-collection
agencies.
2. If you buy items on credit you should buy with cash (groceries,
personal-care items).
3. If you regularly skip some bills to pay others or take credit-card
cash advances or borrow money to make ends meet until payday.
If these situations are familiar, you're not alone.
Nine million consumers sought credit counseling last year. Your
level of debt, your level of discipline and your prospects for increased
income are key indicators of the kind of help that's right for you.
In addition to simple budgeting and credit counseling, but before
bankruptcy, there's debt management services. But only about 33
percent of those who seek debt management qualify for this service.
How it works: Members of the trade group National
Foundation for Credit Counseling or nfcc.org, can be a source of
low-cost credit-counseling services - $50 maximum to set up your
account and no more than $20 a month in administrative fees. Check
the agency's reputation with the Better Business Bureau.
Based on your income and debt, certified credit counselors
will contact and negotiate with all your creditors to agree on a
consolidated monthly payment amount. Every month you send the agency
a single payment that is portioned out to each of your creditors
until your debts are paid off. Most accredited debt consolidators
can arrange with your creditors to reduce or waive interest and
late fees. It's important that the debt-consolidation program have
an educational component to teach you the money-management skills
that will keep you dedicated to managing your future debt appropriately.
