Credit Counseling

​

A Debt Management Plan is a program where you make one monthly payment for all creditors through a licensed service agent that has lower, pre-negotiated, fixed rates with your creditors. Typically the rates are between 4% to 9%. In a Debt Management Plan, you will be paying back 100% of the debt that you owe but you will be paying back at a much lower interest rate.

​

Once enrolled into a debt management program, your job doesn’t end just because a credit counseling agency has agreed to pay your bills on your behalf. In any debt management program, it is important to:

• Always be sure you make regular and timely payments to the agency;

• Contact the agency with any contact information changes;

• Continue to monitor your monthly statements each and every month for accuracy. If you notice any discrepancies, you should notify the agency immediately;

• If you are unable to make a scheduled payment, contact the agency immediately to discuss options;

• If you find that the agency has neglected to make your payments to your creditors, contact the agency immediately.

 

Benefits

• Late fees can be “waived” with debt management.

• Interest rates can be “lowered” on a debt management plan.

• Overall monthly payments can be reduced once getting approved on the program.

• Client’s are only responsible for a single monthly payment, making life easier.

• No creditor harassment should occur when using a debt management plan.

 

Downside

• Third party adverse notation reported on a person’s credit report.

• Debt management plans last for on average 48 months, which can be longer than if a person was to join on a debt settlement program.

• Higher payment than on a debt settlement program. With a debt management payment, it’s usually smaller.

• Some debt management companies will charge high hidden fees. Consumers should only enroll with a nonprofit BBB “A+” Rated Company.