It's Friday night and you just sat down to watch your
favorite show. A few moments later a commercial comes on.
That's right, another credit counseling agency promising to
lower your interest rates and stop collection calls. If
you're cynical or what others consider to be a skeptic, you
will get up and deem this as an opportunity to grab a drink
before your show resumes. However, if your values oblige
you toward proper money management, you will grab a piece
of paper and a pen and quickly jot down that phone number.
Free call. Free Analysis. Why not? Grab a drink during the
next commercial.
What's all the hype about anyway? Well its all about
"credit card debt" in a nutshell. Most of us have it and
truth is, we all want to get rid of it. Lets face it,
credit cards can be a GREAT thing, especially when you're
cruising around the mall window-shopping. A few moments
later you realize you have this piece of plastic in your
pocket and now you can make that "special" purchase. You
may think twice, but in the end you will reward yourself.
Nothing makes us feel better than buying new things.
Unfortunately, if you are not budgeting properly, you will
dread the day that credit card bill arrives in the mail,
and nothing will make you feel worse.
So how do you know you are a good candidate for enrolling
in a Debt Management Plan? Well, if you are experiencing
any of the following examples, you may need to make that
DMP call sooner then you think.
-You pay only the minimum (or even worse you pay less then
the minimum) on your credit card and think to yourself, as
long as you send "something" that's good enough.
-You use your credit card to buy things like food,
gasoline, cigarettes, or beer.
-Your balances are going up and those over limit fees and
late fees no longer surprise you.
-You have more credit cards then a successful gambler has
poker chips.
-You're signing up for every credit card offer in the mail.
-Your credit cards are no longer used for the sake of
convenience but rather because you just don't have any
money.
-You're hiding your purchases from your spouse.
-You change your home phone number in hopes the collection
calls will disappear.
-You have reached the limit on most of your credit cards
and now youve developed a significant amount of stress.
-You're considering bankruptcy as an alternate way of
"getting out" of debt.
-You use cash advances on one credit card to pay another
credit card.
If you are experiencing any of these symptoms, then your
best cure may be a Debt Management Plan. It may be easy
getting into debt, but it does not have to be hard getting
out of it, if you do it the right way. If you don't take
control of your debt and you fall behind on payments, it
will impact your credit report, or even worse, your
livelihood.
A DMP is a far better alternative than bankruptcy to get
out of debt and a better alternative than a debt
consolidation loan or debt settlement. A DMP basically
takes all your unsecured debts, and combines them into one
monthly payment. However, it is not a loan. Instead of you
sending out multiple payments for your credit card bills,
you'll send your credit counseling agency one payment. They
in turn disperse it to your individual creditors. If you
enroll in a DMP through a 501(c) (3) not-for-profit agency,
the fees to start the program should not exceed
seventy-five dollars and maybe a lot less then that
depending on the state you live in. Either way, it's a
small price to pay considering the amount of money you'll
save in the long run. In this case you will have saved
money while nobly paying off the entire debt you owe
without (a) risking the loss of your home if you are unable
to make the monthly payment on a consolidation equity loan
and (b) damaging your credit and paying income taxes on the
amount of debt not paid on a debt settlement plan. Once
enrolled in a DMP, a certified credit counselor contacts
your creditors and negotiates a lower payment on your
behalf. Even better, they will get them to lower the
interest rates, cease collection calls, re-age and report
your account as "current" and waive or suspend past due
fees and over-limit. Sounds good, right? Well remember,
these benefits provide you with the opportunity to afford
the payments and get them "paid off in full." Depending on
your balance and interest rates, your repayment time can
take anywhere between 1 to 5 years. Now, thats a deal!
Considering the fact that without a DMP, you may face a
repayment time of 8-15 years. Believe it or not, even more
then that if you make the minimum required payments each
month.
Once you successfully complete the program, the rewards are
even better. You have rebuilt a better payment history and
you are debt free. So, the next time someone asks you what
is a Debt Management Plan and why should I have one, smile
at them, better yet, give them a smirk and pass along this
article.
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Debt Management Credit Counseling Corp. ("DMCC") is a
501c(3) not-for-profit charitable organization located in
Deerfield Beach, Florida. DMCC provides free financial
educational materials, seminars and a financial literacy
program titled Debt, Money & Credit Concepts to consumers
across the United States. DMCC financial counselors can be
reached by calling 866-618-DEBT, emailing
debthelp@dmcconline.org, or by visiting
http://www.dmccorp.org .
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