Consolidate Your Debt Without a Loan
If you find yourself in a financial crisis or are trying to prevent one from happening, a Debt Management Program (DMP) can help you regain control of your financial situation and get out of debt. A Debt Management Program makes it possible for debt consolidation to be successful, eliminating credit card and other debts.
The purpose of a Debt Management Program is to get you back on track financially through regular payments and satisfy your creditors so they will stop contacting you. This section can help you decide if a Debt Management Program might be the right choice for you.
A Debt Management Program is designed for people who can’t get a loan, but can pay their debt with some assistance and intervention. A credit counseling agency can work with you and your creditors to form a plan that will get you out of debt.
How a Debt Management Program Works
Let’s say you are falling behind on all of your bills. You have no idea how you are going to handle your living expenses and debts, and you’re afraid you will lose everything. Each paycheck is going to play catch up with your creditors. With late fees and back payments, the future is looking grim.
After you have done a budget, you’ll know your bottom line (the difference between your income and expenses). If your budget shows that you can continue to pay your living expenses, but need some help paying your debts, a Debt Management Program can help.
Working with a credit counselor will help you to prioritize and allocate your money to catch up on living expenses and work with your creditors to deal with your debt. A Debt Management Program can help you:
What Kinds of Debts Qualify for a Debt Management Program?
Many debts can be included in a Debt Management Program, including most types of unsecured debt such as credit cards, medical bills, department store cards, lines of credit, collection accounts and taxes. Secured debts such as your house and car always stay in your budget because you need them to live.
All major creditors participate in consolidation programs. Banks, credit unions, other lending institutions, department store cards, hospitals, collection agencies and state and federal governments are just a few examples.
How Do Debt Management Programs Affect Your Credit Rating?
According to published reports by Fair Isaac’s, being on a credit counseling program does not affect your credit score. A Debt Management Program is designed to put you in a better financial situation. Getting out of debt by making consistent payments will get you back into a productive financial category and will improve your credit rating over time.
What are the Fees for a Debt Management Program?
Auriton Solutions charges only minimal fees to clients on a Debt Management Program. These fees help cover expenses undertaken on the client’s behalf. For example, when a program is started, information must be entered into a database to properly administer the program. Letters must also be sent to all creditors. Auriton Solutions has an account management department to help clients communicate to their creditors.
One Monthly Payment
You make one monthly payment to the credit counseling agency, and the agency distributes the money to your creditors. As long as you make the scheduled payments, creditors agree to deal with the agency and not contact you.
In exchange for receiving regular payments, many creditors are willing to reduce interest rates, eliminate late fees and bring accounts current by re-aging. That means the creditor classifies the account as being current so it is no longer considered delinquent.
Your Job in the Debt Management Program
Your cooperation is needed for a Debt Management Program to be successful. Your job is to make consistent payments and maintain open communication with your credit counseling agency.
While you are making payments through a Debt Management Program, you cannot use credit or get new credit. “Credit” for the purposes of a Debt Management Program means unsecured debt such as credit cards or retail cards. Make sure you speak with your credit counselor before getting any type of secured loan such as an auto or a mortgage loan.
The Counselor’s Job
The credit counselor’s job is to discuss where you are financially and what options you have. If a Debt Management Program is the best option for you, the agency will take the monthly payment you send in and disburse that payment to your creditors. They will also maintain communication with your creditors. Communicating with your credit counseling agency will help to keep the situation consistent and in control.
The Creditors’ Job
The creditors’ job is to apply your payments to your accounts, follow policies regarding credit counseling and send you regular statements. You should monitor those statements to make sure they reflect that you are on the program and are making payments.
Call 1-877-332-8700 now to talk to a counselor or complete our on-line free consultation and a counselor will contact you.