Explains How Debt Management Can Help With Debt

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Credit Card Consolidation Loan publishes an article on their website that explains how consumers can get debt relief through debt management.

The lower payments in debt management happens because the current balance of the consumer is distributed over a longer payment term.

Credit Card Consolidation Loan publishes a helpful article that aims to educate consumers about how debt management can help them get out of their debt problems. This program is one of the many debt relief options that can provide consumers with debt freedom in less than 5 years.

Entitled “How Debt Management Can Help With Your Debt,” the article begins by explaining how debt management is the alternative for debt consolidation loan. Apparently, there are qualifications in the latter program that is not necessary in the former.

Consumers usually prefer any of these two because it restructures their debt payments into a single monthly payment scheme. This new plan allows a lower monthly contribution - which the article quickly points out is not caused by debt reduction. The lower payments in debt management happens because the current balance of the consumer is distributed over a longer payment term. Since there is no debt reduction, the credit score of the consumer is usually not affected.

This program may or may not provide consumers with a lower interest rate. That actually depends on the negotiation skills of the credit counselor and the creditor of the consumer. But if it does happen, the article states that the monthly contributions will also go even lower.

Credit Card Consolidation Loan proceed to explain how the whole debt relief process actually begins with credit counseling. Debt Management does not really happen until after the consumer finishes talking to a credit counselor. The article enumerates what transpires during a credit counseling session.

1. Analysis of the consumer’s personal finances and credit obligations.
2. Discussion about the financial goals of the consumer.
3. Review of the debt relief programs that the consumer can use based on the first two information. The credit counselor will provide their suggested course of action.
4. Provision by the counselor of personal finance lessons so the consumer will know how to manage their money and thus keep themselves from debt.

Credit counseling will help confirm if the consumer’s financial situation is well suited for debt management. If not, they will be advised of the specific debt relief option that they can follow.

But if the credit counselor tells them that the consumer qualifies for debt management, the consumer will be provided with details like the process and the fees that they have to pay. If this is something that the consumer can accept, they will go through the following process:

1. Creation of the debt management plan. This is where the consumer will place their proposal of a low monthly payment that is stretched over a longer payment period.
2. Presentation of the plan to the creditors. Once created, the credit counselor will present the plan to the creditors for approval. This is also when the counselor will try to negotiate for a lower payment term.
3. Implementation of the plan. Once approved, the consumer will make a single monthly payment to the counselor. The credit counselor will then distribute this amount to the various creditors as indicated in the debt management plan.

Credit Card Consolidation Loan warns consumers to expect that the whole process will be a bit slow - because of the lower monthly payment. However, the single payment scheme will allow the consumer to work on growing their income so all in all it becomes an advantage.

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Sandra Doyle
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