Debt Management

What is debt management?

Debt management is all about proactively managing the debt you have. If your debt has gotten a little out of hand, you will want to start managing your debt before your lenders call in debt collectors.

What steps should I take to manage my debt?

You can choose two different paths. You can choose to manage the debt yourself by talking to all of your lenders about your circumstances and working out a plan with them. Or you could talk to a debt management expert.

What are the benefits of managing the debt myself?

If you manage the debt yourself, you know that there will be no further expenses associated with the process. A good place to start is to take a shot at creating a monthly budget. You’ll know how much you can afford to pay in monthly repayments and that will help you when you are talking to your lenders.

What are the benefits of consulting a debt management expert?

A debt management expert will take a look at your existing debt and help you with a monthly budget. They will also actively find ways to reduce your monthly payments. However, it is very important that you find a certified expert. Do not assume that everyone in this field has your best interests at heart, even if they are employed by nonprofit organizations. A local consumer protection agency should be able to recommend reputable debt management counselors.

What can I expect?

It is always cheaper for a lender to have someone paying back what they owe than someone who seeks bankruptcy. You’ll find that lenders will try to be accommodating in helping you with your debt problems. There may be times when they simply can’t help because you can’t meet their minimum payment criteria, but if you have a regular income then they will try and help. If you choose to consult a debt management expert you should expect some very practical advice to help you manage your money as well as some proactive assistance with your lenders. They will take into account all of the information you have provided and work with you to make your life, financially speaking, far more comfortable and manageable.

What would a good result be?

A good result would be that you do not lose any of your possessions, whilst your monthly payments are significantly reduced to ensure you can keep up with your monthly commitments.

Is there anything that I need to be careful of?

As we have already mentioned, make sure you find a reputable debt management expert to work with. Also, be aware that any debt that you renegotiate will have different repayment terms. This could mean that though your monthly repayments are more manageable now, in the long run, you end up paying far more for the credit line.