Debt Management

Is debt management a foreign concept to you? If you're in debt, it probably is. Until now, that is. On this page, we'll tell you all about the different debt management programs.

Getting Help from a Debt Management Program

If you're a proud person, you may not want to admit that your debt is out of control. At the very least, you may not want to admit that you need debt help. You think you can manage your debt just fine. But eventually, you're going to have to let go of your pride. After all, you don't want your credit to suffer. Fortunately for you, bankruptcy is no longer your only option when your debt threatens to overtake you. In fact, Congress wants to discourage people from filing for bankruptcy, so they have passed a law requiring anyone who wants to file for bankruptcy to go through a debt management programfirst. If that isn't a ringing endorsement for the debt management industry, what is?

Now, we realize that debt management is a vague term, at best. That's why we're going to try to demystify it for you. Debt management refers to a group of five different programs, all designed to help you get rid of your debt. We'll go into greater detail about these on other pages of this site, but for now we'll just give you the basics:

• Debt consolidation mortgage - For this program, you have to be a homeowner. And if you are a homeowner, this is really the best debt management program for you. You can borrow the amount of your unsecured debts from your mortgage lender to pay them all off. Then that amount is added to your mortgage, so you wind up paying off your high-interest debts at the same low interest rate as your mortgage. And since mortgage interest is tax deductible, it makes the deal even sweeter!
• Debt consolidation loan - For this program, you need collateral like a boat or a car that's paid for in full. If you have it, you qualify. A debt consolidation loan is a loan given to you to pay off your unsecured debts. The interest rate is much lower than what you are paying on your unsecured debts, so you get out of debt in about five years.
• Debt settlement - For this program, you need to have access to a lot of cash because when your debt settlement agent gets the total amount you owe knocked down by 60-80%, your creditors will want the total amount due right away.
• Student loan debt consolidation - This is a program for those with $10,000 or more in student loan debt. This low-interest loan combines all of your unpaid student loans into one. Your payments are cut in half, too, because you pay it back over a longer period of time.
• Debt consolidation This program is a sort of "catch-all" program. For debt consolidation, you don't need to be a homeowner, you don't need to have collateral, you don't need to have access to a large sum of money or have student loan debt. When you enroll in a debt consolidation program, a debt consolidation company contacts your creditors to get you reductions in your interest rates. They might also be able to get past fees removed, thereby lowering your balances too. Then they put all those new, lower balances together under one umbrella and you make one monthly payment to the debt consolidation company, which they in turn divide among your creditors. Again, you can be out of debt in five years under this program.

See? When it comes to debt management programs, you have a lot of options. There is no sense in making hasty decisions about the right debt management solution for you. Your best bet at this moment in time is to familiarize yourself with the each and every debt management service so that when you do decide to contact a specialist, you can discuss each and every debt management program and actually sound like you know what you are talking about.

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