Debt Management Program - Is This For You?

Whether you can no longer afford to pay your bills, or you're anticipating that paying your bills is going to become increasingly more difficult, you're probably wondering if a debt management program is a good debt relief option for you.
Below is additional information that is designed to assist you with the choices that are available to you.
What is a Debt Management Program? A debt management program is a debt relief plan that is typically available through a consumer credit counseling agency.
Depending on your personal situation, this may be a good option for you.
You see, if your credit cards carry extremely high interest rates, and you're experiencing some difficulty paying your bills (or can only afford to make the minimum monthly payments), a debt management program may be exactly what you should consider.
How does a Debt Management Program work? Once enrolled in a debt management program (DMP) your assigned consumer credit counselor will work directly with your creditors to reduce your interest rates and eliminate fees, such as over-the-limit fees and late fees.
Once this is accomplished, there is a very good chance that your monthly payments will become lower.
If you can feasibly afford these lower monthly payments, there's a good chance you can successfully complete a DMP.
If, however, you find that the new monthly payments are not low enough for your budget, you may need to consider other options, such as credit card debt settlement or bankruptcy, which I will cover later.
Are there any negative results that occur as a result of DMP enrollment? There is a strong possibility that your enrollment in a Debt Management Program will appear on your credit report, thus resulting in the potential to be refused credit in the future.
But, please remember that if you're considering DMP enrollment, the last thing you need is more credit.
Additionally, it will be required that you close all of your accounts, and you will no longer be able to use your credit cards for purchases.
Again, this should be considered a positive instead of a negative.
One final negative point to consider regarding Debt Management Programs is that if you happen to have a "bad" month and cannot afford your payment to the consumer credit counseling agency that you have hired, you may be dropped from the program, and your interest rates and fees will be restored to what they were prior to your enrollment.
So, before entering this type of program it's important that you review your finances carefully to ensure that sufficient funds will be available to cover unexpected emergencies.
What if I determine that a Debt Management Program is not a good option for me? If you believe that you cannot afford to enroll in a debt management program you may want to consider credit card debt settlement or bankruptcy.
Credit card debt settlement is a program whereby your creditors will accept less than the full balance as settlement in full.
In other words, if you happen to owe $20,000.
00 on a particular credit card, there's a very good possibility that your creditor will accept $7,000.
00-$10,000.
00, and consider the account settled in full with no further balance owing.
This is a very viable option for those who have access to funds through a 401K, home equity, or loan from a family member or friend.
Additionally, this type of program can be feasible if you can't quite afford to make the requested monthly payments to a debt management program, but can afford to set aside slightly less than what a consumer credit counseling agency is requiring.
Of course, bankruptcy is also an option, depending on your current financial situation.
The bottom line is that no matter what you're facing financially, there are programs that may work for you; it's simply a matter of conducting sufficient research to determine what will be your best option.
One very important factor to remember, however, is this: Please, do not sign up with a company that makes it sound as if they are the answer to your prayers.
No matter what option you choose, it could potentially be a bumpy ride, and you want to hire a company that will be honest about all of the pitfalls of their particular program.
Remember, the Better Business Bureau is available for a reason - use it.
Whatever it is you choose to do, I wish you the very best for a positive financial outcome.