You’ve seen the ads, you’ve called for consultations, and you’ve pondered this thing 6 ways to Sunday and decide that a debt management program is the answer to your debt problems. Signing up for a debt management program will require all of your creditors to stop harassing you, will cut your payments and overall debt by 50%, and magically erase your debt within 5 years. Or so we hope.
When the bloom is off the rose however, a majority of consumers will realize that their financial situation is now much worse.
Most Debt Management Programs will help you wipe out your debt. You will have to file bankruptcy to do it, but who really bothers with the fine print anyway?
There are a handful of different types of Debt Management Programs. The one that seems to be the most popular is Credit Card Debt Settlement.
The concern with a majority of Debt Settlement Companies is that they over sell Credit Card Debt Settlement. The strategy itself can actually be very effective for consumers, but it should only be used in the right sets of circumstances.
Practical Credit Card Debt Advice to help determine if Debt Settlement might make sense for your financial situation.
1. You can no longer afford to make the minimum payments on your debts.
2. You have determined that an interest rate reduction or a credit counseling program is not going to to provide enough relief.
3. You talked to a bankruptcy attorney and realized that you would not qualify for a chapter 7 bankruptcy.
4. You have a lump sum or will be able to save up enough money to settle your debts and satisfy your creditors.
5. You realize that stopping payments to your creditors could result in a lawsuit.
6. Getting rid of your debt is a higher priority to you than preserving your credit rating.
7. You are prepared to deal with creditor phone calls asking for money.
This is just some general Debt Advice to keep in mind when looking into Debt Settlement or other Debt Management Programs. The reality is that every debtor should have an evaluation of their entire current and future financial situation. Your age, your future earnings, your net worth, your retirement plans, your credit score and so much more, need to all be part of the equation.
