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Clear Debt with a Debt Management Plan

Posted on September 23, 2010
Filed Under Debt Reduction | Leave a Comment

Returning to a simpler mode of living and working to clear debt seems to be a common goal for many Americans today. There is a need to take back control of finances and stop slaving away just to pay creditors. Becoming debt free ensures money in the bank and peace of mind.

An excellent way to clear debt for good is to work with a reputable debt elimination service. They will set you up with a debt management plan that includes negotiating with your creditors to lower the interest rate and monthly payments.  A flat amount to cover the payments is taken out from your bank account each month and they pay all your creditors for you. A small fee of about $25 is charged for this service.

In the set up process, the counselor will help you determine how much additional money you can pay if possible to speed up the process. If not, then as soon as the first creditor is paid off, then that payment is attached to the next creditor’s payment and the total pay off starts happening faster. This is referred to as the debt snowball method.

You can certainly do this yourself, but it takes a special kind of assertiveness to negotiate with credit card companies, especially if you are behind on payments. Working with a debt elimination service shows your creditors that you are serious about paying your bills and they will be more apt to agree to negotiation through a neutral party.  Letting the service pay your bills for you takes away the anxiety of getting everything paid on time and also the urge to use the money for something else.

A couple of caveats to be aware of is these services only work with unsecured credit which leaves out student loans, car loans and mortgages. The one credit card company that will not work with debt elimination negotiators is American Express. They have their own in-house payment plans for those who have lost income.

Getting help from an outside source is often a great relief from having to juggle it all yourself. It provides a straight and narrow path back to a life of financial freedom.

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