Tips For The Do- It- Yourself Debt Manager. For many people, admitting that they have a debt problem is as far as they want to go. After that, it's time to pass the baton to a professional debt counselor or credit repair company. In some cases, a financial advisory or attorney might even be brought into the picture. However, for others, control is the key. They want to feel in control of all correspondence, phone calls, negotiations and other issues that come part and parcel with debt management. There are pros and cons to both sides of the issue. If you are a hands- on type and understand financial issues, it's possible to tackle your debt challenges yourself - and you might even save a little money. But if the thought of negotiating with creditors, writing strong letters to credit bureaus and all those other tough tasks send you swooning, then hiring a reputable debt management professional is a good way to go. In this article we'll explore both paths and then provide seven tips if you decide to go it alone. Being Your Own Debt Manager. The primary advantage of being your own debt management advisor is that nobody knows your personal financial situation like you do. There's no explaining to a third- party advisor what debts you owe, how much money you've borrowed, or any medical issues or job loss issues that contributed to your debt problems. The downsides are notable, however, and you will need to ask yourself some hard questions: Do you have the time to train yourself and learn about debt management? It's a do- it- yourself approach that comes with some risk, but if you know what you're doing, you just might save your own bacon if debt gets too heavy. DIY Debt Negotiation. ACCC provides debt management solutions to help with getting rid of debt, debt relief, and securing a debt free future. What does debt management mean in finance? Debt management financial definition of debt management. Debt Forgiveness Program; Debt GDP Ratio; Debt GDP Ratios; Debt Income Ratios. Debt negotiation, also known as debt arbitration or debt settlement, is a sensitive yet critical issue. Basically, debt negotiation is a last resort before you start looking at bankruptcy - a route that definitely requires professional help. Some issues will be easy to work out, like an old utility bill from college that suddenly pops up on a credit report. You're sure you paid your half, but it appears your roommate wasn't so reliable. In these instances, debt negotiation tends to be much simpler and can be resolved with a short payment plan at, for example, no interest payments. The idea behind do- it- yourself debt negotiations is to reduce or minimize the payments you make to a creditor who you are likely already in arrears with. You can begin by contacting the creditor directly and seeing if they're amenable to you skipping a payment, knocking a few bucks off your payment or, as mentioned above, eliminating any interest payments. At the very least, it doesn't hurt to ask. Another solution is to consolidate your debts. Consolidating usually buys you some time and bundles all of your loans and debts into one payment. Tips for the Lone Wolf. If you do handle your own debt negotiations, be prepared to: Pay some money up front. Your lenders may want at least 5. Note that some creditors won't even begin to negotiate until they receive some money from you. Be ready to deal with an attorney. Most creditors have agents or customer service reps to handle some debt negotiations. But at some point be prepared to see a lawyer get involved who is representing the creditor. Usually, there has to be a substantial amount of debt before this happens. Send a money order for any credit payments. When you make a payment to your creditor with a credit card or banking account, in the process they have obtained all of your pertinent banking information. If you are sued, it's simple for the creditor to get at your funds through your bank account. So, make sure you pay with a money order. Seek . Creditors will usually settle for less on the dollar so they can guarantee they at least get something back. This means you can expect to pay less for a lump- sum payment; however, you should also demand that the debt be shown as paid on your credit report. Again, it never hurts to ask. Bring a lawyer to bolster your defense. If negotiations go nowhere, or if either party fails to live up to their end of the bargain, the lawsuits can start to fly. It's to your advantage to be prepared early. Be realistic. You might be tempted to back down a bit and accept a repayment deal that is still too much for you. Don't agree to any debt payment plan that you can't pay. Tell them what you are willing to pay, and let them know if they demand more you could be forced into bankruptcy (where they will receive no payback at all). Find out how far the creditor is willing to go. If a creditor offers three months at no interest, ask for six. Always aim high and understand how much negotiating room you have to work with within your personal budget. Conclusion. If you have the time, the expertise and the detail- oriented demeanor of a professional debt manager, it may be the right path for you. Try starting off with a manageable 9. At the end of that time, if you've made solid inroads and have negotiated your debt downward and you credit score upward, keep at it. If not, then it's time to get a professional. The Truth About Debt Management. Myth: The debt management companies on TV, like Consumer Credit Counseling Service, will save me. Truth: You may get out of debt .. These companies help . This is not a loan as with debt consolidation. Sometimes people get the two confused. However, because Americans are up to their eyeballs in debt, the debt management business has become one of the fastest- growing industries today. Companies like Consumer Credit Counseling Service can help you get better interest rates and lower payments, but at a price. When you use one of these companies and then try to get a Conventional, FHA, or VA loan, you will be treated the same as if you had filed Chapter 1. Mortgage underwriting guidelines for traditional mortgages will consider your credit trashed, so don't do it. Real debt help is found only in changing your behavior. In short, debt management companies are out. Change your financial behavior and change your lifeāfor good. True debt management is about one thing: you controlling your money. The good news is that there's not some magical, mystical formula to good debt management. The solution is common sense and having a plan for your Total Money Makeover. Grandma's simple way of handling money. Good debt management is 8. It isn't rocket science as some debt management companies try to make you believe. Is it easy? In fact, it's really hard most of the time. It's amazing to see people change their lives through simple determination and having a plan that works every time. Once you have a real debt management plan in place, its only a matter of time. We have people every week email or call us about how they have paid off $1. Now, you may be thinking, . They must be making six figures to do that.! These are just people who are serious about getting out of debt. Many of them are making $3. It's all a matter of attitude.
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January 2017
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