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January 7, 2012
Even with all the benefits offered by most debt management programs available today, there are still times when debt management plan is not the best solution to your debt problems. In this part, we are going to discuss more about when to use debt management plan. Let’s get started, shall we?
Debt management plan works best when you are dealing with unsecured debts that you find hard to manage. If most of your debts are secured loans such as mortgage or auto loans, then debt management plan may not be the best solution for you. This is because secured loans are not covered by the debt management plan.
Calculate the total existing debts that you need to repay, have a good debt management plan formulated for you by a reputable debt counseling agency, and make sure you can repay all your debts in less than 5 years. If with the monthly payment you can allocate you still can’t repay all your debts in 5 years, then it would be best to find other debt solutions such as IVA or even bankruptcy.
On the other hand, a good debt management plan works superbly well even when you have relatively low amount of money to allocate for debt repayments; lenders usually give up to 75% of discounts and cuts, which means the principal amount of your debts will be reduced greatly with the help of your debt counseling agency.
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