For some people, it is too much of a chore to settle all their debts. It can really get frustrating at times to try and meet all the financial obligations and at the same time, deal with the mounting debts that are exponentially increased by high interest rates.
Working of paying off your debts is manageable but you need to display a strong determination to see it through. You need to discipline yourself to curb your disastrous spending habits and also have the patience to research on what you need to do. You need to know what to do and how you will do it. All the while, you will continue to take calls and receive past due notices harassing you to pay off your debts.
If all of these seem confusing and difficult to pull through, you always have the option to get professional help. While debt management companies will definitely require some fees for their professional services, you may find that they are quite worth it. The government has enforced rules that encourage these companies to request for payment only when they can promise results.
But for the sake of helping you decide if you will get them or work on this on your own, we will list the advantages and disadvantages of working with a debt management company.
How They Work
The bottom line of debt management services is helping you coordinate and negotiate with your creditors so you are more able to pay off your debts.
But before they can do that, you will have to sit down with them so they can identify your financial capabilities. They will calculate with you all your essential expenditures like food, rent and utility bills. Once all the necessities are out of the equation, you will compute for the amount that you can afford to pay. That being said, they will place you in a position wherein you have enough to spend for your daily needs and at the same time, allow you to pay off your debts.
When that is settled, you will discuss the best option for you to pay your debts. One of the main things that they will work on is to come with a new agreement so you will end up with only one payment. That is what debt consolidation is all about.
In a better scenario, the debt management company can also help you achieve debt settlement. That means you will be paying for a reduced amount while the rest of the debt is forgiven. With all the information that you have computed together, they will explain your financial status and negotiate that a reduced balance is better than nothing at all. They can even help you waive off late penalties charges.
Best of all, creditors will no longer harass you – or at least will reduce calling you. They will be coordinating with the debt management expert now and will course through any concerns through them. That means less stress for you as you concentrate on increasing your funds to be able to pay off more of your debt.
What They Cannot Do
As great as all of these sound, there are limitations as to what the debt management company can do on your behalf. For instance, they will not pay off the loan for you with their own funds. You will have to send your payments in an account that will fund the debt payments they will send to your creditors.
Also, you may find that you have a longer payment term. If you wish to lower your monthly payment, you need a longer period to pay off your debt completely – at least if you do not arrive at a lower balance settlement.
It is also not a guarantee that all your creditors will agree to the terms they will propose. Though that is the ultimate goal, the company does not have any power over the decisions of the credit card companies. But best efforts usually result in having one or more of them agree.
And once you enlist the help of any debt management service, that will affect your credit score. While it is not permanent, you will have a hard time getting another loan or financial assistance – at least until after you have finished your debt management plan.
If you wish to find out more about what a debt management company can do for you, National Debt Relief is here for you. Give us a call or fill out the form on this page. We will gladly sit down with you to talk about your financial woes.
