What is Debt Management?
Debt management is a program where consumers in financial distress receive relief from their creditors through a pre-defined set of benefits offered through DebtGuru – American Credit Foundation.
How Does Debt Management Work?
If your financial situation is such that your monthly expenses far exceed your monthly income thus you are unable to make timely in-full payments each month then you are in financial distress. In these cases creditors like your credit card company, unsecured loan company etc. understand that if you do not receive relief from the monthly payments you may find yourself in bankruptcy court. This can mean little to no repayment of your debts to your creditors and a severely damaged credit report for you. Instead, creditors offer concessions such as the reduction of interest rates, removal of late fees and other terms that will lower your monthly payments enough that you are able to pay them in full.
When you go through our Credit Counseling service an evaluation of your finances is completed. Ultimately you determine the amount you are short in paying your bills each month. This information is used by your Debt management program specialist to create a budget, help find needed relief benefits from your creditors and arrange for new repayment terms to come current on your debts. Essentially, the goal is to gain enough relief from your creditors so that you are able to make timely monthly payments and start on a course to a stable and secure financial future. This is the best outcome for all parties involved.
When your Debt Management Plan is completed and approved by both you and your creditors, you will then begin making monthly payments through your account with American Credit Foundation. This money is then used to pay your creditors according to the new terms established in your relief plan. Your Debt Management program will be finished once all the debts in the plan have been paid in full.
Benefits of a Debt Management Program.
The Benefits of a Debt Management Program are powerful. They include many potential forms of relief including:
- Reduction of interest on your debts (credit cards or unsecured loans).
- Reduction of monthly payments.
- Reduction or dismissal of late fees.
- Reduction or dismissal of Over-The-Limit fees on credit cards.
- The cessation of all collections activity for debts in your program.
Who Qualifies for a Debt Management Program?
A close evaluation of your income and expenses is required to fully determine if your financial situation is eligible for a debt management program. In general the evaluation of your finances would conclude one or more of the following:
- You are making payments but not reducing your debt.
- You are behind in payments.
- You are unable to make regular monthly payments in full.
- Your income is less than your expenses and that without some form of relief your debt load would continue to grow until bankruptcy was eminent.
How Do I See if I Qualify For Debt Management?
The process to understand if a debt management program is the right option for you and if your financial situation qualifies is both easy and FREE. Our Credit Counseling service will perform a full evaluation of your finances, educate you on your relief options and determine if it is appropriate and if you qualify for a debt management program.