Finding someone to turn to when you’re overwhelmed by debt can be challenging. At one of your most vulnerable moments, you need a debt management partner and plan you can trust to have the expertise needed to make a real and lasting change for your financial future.
A debt management plan is developed by a service company who works with your creditors and negotiates a payment plan to help you repay your debt. In most cases, the creditor agrees to reduce your interest rate and may even reduce some fees. Typically, these payoff programs last two to five years, depending on how much debt you owe.
Debt management programs aren’t for everyone — or for every kind of debt. Obligations like student loans and tax payments aren’t eligible. But, if you’re among the nearly 40% of Americans with credit card debt, a structured payoff plan might be a great option.
Choosing the right expertise is critical; here’s what to look for:
Most debt management companies offer one source of relief. A manager with options will work to determine the best course of action for you. That could be a debt consolidation loan, which trades your myriad credit bills for one loan payment at a favorable interest rate, allowing you to pay off your creditors immediately and retire your loan at a steady pace. The single, monthly payment was cited in a 2018 U.S. News survey as the top reason for consolidating debt. It relieves the stress that comes from dealing with too many credit cards and too many payment deadlines. A recent U.S. News survey found more than 60% of respondents who had pursued a consolidation loan were relieved by lowering monthly payments, improving their credit score, and — most importantly — efficiently eliminated their debt.
Another option might be a debt management plan, in which your current credit balances are negotiated down and you make one monthly payment at a significantly reduced interest rate to the debt manager, who in turn pays your creditors.
Having documented experience successfully helping others emerge from debt is a great sign that a debt consolidation company can help you, too. Ask for settlement percentages and testimonials from past customers. Check to see if the company has a solid history and inquire about accreditation from an industry or consumer group such as Better Business Bureau or the International Association of Professional Debt Arbitrators.
An experienced debt manager will work closely with you to understand your entire financial picture. Look for an expert in budgeting and managing debt, money, and consumer credit. Understanding your income, obligations such as rent or a mortgage, and living expenses required for you and your family such as food and utilities, is paramount to establishing a repayment plan. Once it’s determined how much money can be applied to your debt, your manager will work with your creditors.
In return, you’ll get a breakdown of what exactly you owe, what your monthly payment will be and how long it will take to complete your repayment plan. Instead of a mailbox full of overdue notices, you will receive one monthly statement from your debt manager. In it, you’ll be able to see exactly what you owe and track your progress. So long as you maintain your account, that monthly payment won’t change until you’re completely debt-free. When one of your accounts is paid in full, your debt manager will roll that portion of your payment into paying off another account.
Think of it this way: If your debt were a car, this would be like stepping on the accelerator, getting you to your destination — a debt-free life — quicker!
Typically, a Debt Servicing Manager will show you exactly what to expect in the repayment process. As with many new experiences, it can be a stressful time and having a knowledgeable counselor will help to ease that stress.
As mentioned, debt management plans typically last at least two years, and could last five or more years, depending on your total debt. While you’re in your debt management plan, creditors will close or suspend your accounts, so be prepared to use cash only for that period. (Sometimes, one credit line can remain open for emergencies or business needs; an experienced debt manager will help you determine your eligibility.) Giving up your credit cards may sound a little painful now, but there’s no sense in entering a repayment plan if you continue to tack on debt.
You’ll likely hear from your creditors while a repayment plan is being negotiated on your behalf. These calls and letters can seem really threatening, but a good manager will assure you that these will stop once the credit companies’ records are updated and reflect that you’re on a payment plan.
It may be unsettling but stick with the program and soon you’ll realize the true benefits: Your balances will decrease, your stress will abate, and your sense of accomplishment will soar!
Trust is paramount in this process, so make sure any debt management company you’re considering is able to answer your questions thoroughly and honestly. Revealing the intimate details of your finances and understanding the steps to retire your debt can be unnerving. Knowing what to expect will make for a stress-free repayment period.
For more than a decade, Vantage Acceptance has been a recognized industry leader, leveraging our long-term relationships with credit card companies and others to help thousands of people settle millions of dollars of debt.
Vantage Acceptance is committed to understanding your financial position, creating a unique solution to eliminate your debt, and enabling you to achieve your financial goals.
Thousands of former clients have already experienced the relief of becoming debt free with Vantage Acceptance. For clients who have faithfully adhered to their repayment plan, we have a 100% success rate at eliminating debt. Their success can be your success; with your commitment, YOU WILL BE DEBT-FREE.
Contact us today at (800) 725-0214 for a no-risk consultation. Let one of our expert Debt Specialists show you how much you can save and how easy it is to get started on your debt-free life.