Every year, millions of Americans find themselves buried deep in credit card debt. Sometimes, these debts are so massive that paying them off can feel absolutely impossible. Thanks to debt relief plans, it’s not. Debt relief plans can help consolidate even the most extreme amounts of debt and make your payments more manageable and purposeful. Here’s how they work, and why you should consider one if you’re struggling.
A debt relief plan is, simply put, a plan designed to help you get out of debt. Many different companies offer debt relief plans, and all of them usually work with creditors to get your debts decreased. Debt relief plans can help lower interest rates, lower fees and lower monthly payments on unsecured debts (read: debts that aren’t tied to any sort of property, like a car loan). Think it sounds too good to be true? It isn’t.
Here’s some psychology behind why this works: Your creditors want to get paid. When you’re deep in debt and unable to make any sort of payment, the creditors don’t make any money either. So the deeper into debt you go, the deeper into debt your creditors go, too. Making your debt more manageable is actually in your creditors’ best interest: If they make your debt feel like something you can eventually conquer, you’re more likely to start actively paying it off. It’s a win-win situation.
Every debt relief plan depends on an individual’s specific situation, however, they all work similarly. Here’s what will happen when you find a debt relief plan.
1. First, you will work with your debt relief plan representative to develop an easy plan for saving money. Usually, this involves depositing a small amount of money into a savings account every month. This savings account is designed to make a positive impression on creditors and give them something to evaluate when the time comes to address consolidating your debt.
2. Your debt relief plan representative will then contact creditors and negotiate your debts with them. They will usually petition for lower monthly payments and lower interest rates, and are sometimes even able to get certain debts erased completely, per specific agreements.
3. Once your debt relief plan is put into place under the newly negotiated terms, you will be responsible for monthly payments to the debt relief plan company instead of to your creditors. Rather than making several payments a month to multiple creditors, you will only need to worry about one. With this more manageable payment plan, with potentially lower interest rates and payments, your debt will no longer seem like an impossible hurdle. And you’ll be able to envision a happy, healthy, debt-free future.
Once you’ve decided you’re ready to follow through with a plan to get out of debt, what’s next? It’s always easier said than done. Your debt consolidation choices can be divided into two major categories: debt consolidation and debt settlement programs. Take the time to learn how these will affect your credit.
Once you find a simplified deal for all your loans, you will also need to change the behavior patterns that got you into debt in the first place, or make adjustments in your life so you can afford your monthly payments with emergency savings to spare. Most debt consolidation plans require an aggressive payback schedule in order to get out of debt in a short amount of time. You will likely have to consider your lifestyle and expenses and adjust accordingly. This is the most critical part of the equation, but it’s totally in your hands.
If you’re struggling with debt or with juggling multiple creditors at once, now is the time to take action, do research and find a debt relief plan that works for you. The first step in the process towards debt relief begins with a simple internet search.
Pyles, Sean. (2018, March 29.) Debt Management Plans: Find the Right One for You. https://nerdwallet.com/blog/finance/compare-debt-management-plans/
Sandberg, Erica. (2018, May 10.) 9 Things You Must Know About Debt Management Plans. https://creditcards.com/credit-card-news/help/9-things-about-debt-management-plans-6000.php