The average length of a DMP is 3-5 years, but is shorter for clients who decide to aggressively deal with their debt. Many clients pay down debt faster by using income tax returns, inheritance money or some other unexpected source of income. There is no penalty for paying the debt off early. You can make additional payments while on the plan and pay off your debt faster.
As a debt junkie for almost ten years, I ran up credit card after credit card living like my salary was about four times its actual size. Stupid things I bought on credit included flying lessons, weekends in Las Vegas, and a brand new pickup truck. Hey, I never said I wasn’t having fun. (Remember, I’m on the other side of 25 now, so I started college pre-recession… during the dot-com boom. Back then, I actually thought I could graduate with a sociology major and find a $75k a year job—because I knew people who did!)
If a consumer’s financial problems resulted from too much debt or inability to repay their debts, a credit counseling agency might recommend enrollment in a debt management plan (DMP). A certified credit counselor will review a consumer's overall financial situation and offer customized money management advice. This advice may include a DMP designed for the client's unique circumstances. 
Credit counseling. Most businesses in the debt-relief industry offer free credit counseling services. Certified credit counselors help consumers build an affordable budget and learn how to live with it. Counselors teach them the debt-relief options available and offer advice on which one best suits their situation. This is an overlooked aspect of many debt-relief services. It increases the financial literacy of consumers by leaps and bounds.

This is paramount to mapping out a plan to pay off your debt. There are two approaches that are worth considering.  The first is where you list your debts smallest to largest regardless of the interest rate. This is the method that we used to pay off $52,000 in debt in 18 months and it worked great because it helped us build momentum. When we paid off our first debt it put wind in our sails. Even though we had higher interest debts, this gave us something that was very powerful: the belief that we could get out of debt quickly if we stuck to the plan.
You need to start off with a plan so you know just how much debt you have and your ability to pay them off. Also, it will provide you with a black and white scenario of your financial standing. The easiest way to do this is by creating a spreadsheet. If you don’t already have a spreadsheet on your computer you could use the free one that comes with Google Docs. You will want to create four columns – one for the name of your creditor, one for the amount owed, a third for your minimum payment (if applicable) and a fourth for the payment due date. Fill out these columns and you will have a good picture of your debt, which is the first important step in getting it under control.

I doubt that would be the case. The main impact will be from closing those accounts. FICO doesn’t take into account that you are in credit counseling when calculating your credit score. In other words, you don’t get penalized specifically for credit counseling like you would for, say, a late payment or bankruptcy. Plus you’ll hopefully be learning how to live debt free so you don’t have to rely on credit cards again.


Most of the major banks and card issuers are more aggressively offering their own debt reduction and settlement plans for unpaid debt and bills. It is in their best interest to do this as well. Not only are they cutting out the middle man, but they will also receive at least some payments from the customer, rather than nothing. Find a list of credit card company settlement programs.
When it comes to student loan debt, you might consolidate federal student loans into one loan through the Department of Education's Direct Consolidation Loans. Also, or alternatively, you might take out a private loan to consolidate debts -- that's generally referred to as refinancing student loan debt. The advantages of consolidating can include lower monthly payments (if you extend your payment period) and getting out of default, while drawbacks can include less flexibility and a longer payback period -- which can mean more interest paid, overall.
A Credit Counseling Session is an overview of your total financial situation, which will uncover ways to provide you with debt relief. It can be done on the telephone, online utilizing our industry-leading tool, or in-person. A certified credit counselor will review all of your income, expenses, and debts. Your counselor will then make recommendations to help you get back on track financially (one of which may be a debt management program). For additional information about our credit counseling program, click here.
Some of them include debt consolidation, foreclosure and mortgage delinquency counseling, and budgeting. Review alternatives to a foreclosure that may be available to you such as mortgage modification. A counselor can sometimes work directly with your creditor or bank to enter into installment plans with them, or they help facilitate a solution with all impacted parties.
Reducing the term of your loans, even with a lower interest rate, will likely increase your current monthly payment. But with fewer years of payments to handle, you can save a bundle over time. SoFi, a top student loan refinancing provider, offers one such service. With no prepayment penalties and no hidden fees, it’s an easy way to save thousands of dollars in interest payments over the life of your loan.
What Does National Debt Relief Do? National Debt Relief is a leading debt negotiation company with a BBB A+ rating and thousands of positive client reviews. So what does that mean? We negotiate with your creditors to get a reduction of your outstanding credit card balances. We get your creditors to agree to a lump sum payoff amount and they will forgive the rest of your balance. Debt negotiation is one of the most effective choices available to consumers if you qualify. It’s a great choice if you have more debt than you can pay off in a 2 – 3 year time frame or are experiencing a financial hardship that has you falling behind (or just about to be) on your monthly payments.
Under no circumstances should any information from this blog be used as replacement for professional financial advice. DollarSprout.com is owned by VTX Capital, LLC and neither are licensed by or affiliated with any third-party marks on this website and third parties do not endorse, authorize, or sponsor our content except where clearly disclosed. DollarSprout.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.
The Telemarketing Sales Rule, enforced by the Federal Trade Commission, requires companies that sell debt relief services to explain their fees and tell you about any conditions on their services before you sign up; it also prohibits companies that sell debt relief services by phone from charging a fee before they settle or reduce your debt. For credit counseling that promises to get you into a DMP, that means the company cannot collect a fee until you have entered the DMP and made at least one payment to your creditors using the DMP.
Debt management and debt settlement are two very different repayment options. A debt management plan provides regular monthly payments to your creditors. In contrast, a debt settlement program often encourages you to stop sending payments to creditors, which can result in serious consequences. The risks associated with debt settlement programs are important to understand. Below is a summary of things you should consider before choosing debt settlement as an option.

I’m also going to start back up my college business. I ran a small business in college that brought in a couple hundred dollars a month. Although in college I did it by travelling, I could provide similar resources and work via a web site. I only work 14 days a month at my job, so I know I have time to build this and work towards it. Hopefully it can generate an additional $500 per month for me as well which will greatly help!
Compare debt settlement vs. debt consolidation programs as they have differences between the two. One or the other may be a better option for you and your family, and it depends on your personal financial situation. Get information about the pros and cons of these two approaches. Read tips on which option may be the best option for you and your situation. Compare debt settlement and consolidation.
Many people fail to recognize that there are many instances where you can negotiate and in turn, lower your debt. Take medical bills, for example. “It can really help to negotiate with the medical provider,” said McClanahan. “If you’re willing to pay them real money over time, you can end up paying pennies on the dollar of what you own,” she said. In addition to negotiating, McClanahan suggested asking hospitals or health centers whether they have any financial assistance programs that you might qualify for.

Can I Negotiate With My Creditors On My Own? Yes, you can negotiate with your creditors yourself and save yourself an extra 18-25% off your debt. (Our fee is 18-25% of the debt amount depending on the state they live in and the amount of debt they have.) Not everyone wants to talk to their creditors on a regular basis so they trust us to do it for them. Our debt negotiators have extensive knowledge in Federal & State consumer laws & exercise the Fair Credit Reporting Act, Fair Credit Billing Act, as well as the Fair Debt Collection Practices Act to help settle your debt.
Balance-transfer cards can help when trying to pay off credit card debt, because you can transfer thousands of dollars owed to a new card that offers a very low initial interest rate -- often 0%. That interest rate will be in effect for between six and 21 months, after which a more standard interest rate will apply. That standard rate will not necessarily be a great one, so you should seek cards that will charge you relatively low interest rate ranges following your teaser-rate period. Your credit score is likely to influence the interest rate you're given after the 0% rate expires, so this is another reason to get your score as high as you can.

A debt collector generally is a person or company that regularly collects debts owed to others, usually when those debts are past-due. This includes collection agencies, lawyers who collect debts as part of their business, and companies that buy delinquent debts and then try to collect them. The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

Take on a part-time job. Working 10 more hours a week for a year at $12 per hour can generate $6,000 before taxes. You might work at a local retailer or at home, perhaps tutoring students, teaching music, doing freelance writing or editing, or consulting. Check out new-gig-economy jobs like Uber if you have a car, Rover and Wag if you're animal lover, or Care.com if you want to babysit or tutor. Post any services you may offer, like handyman or lawn care, on neighborhood email listservs and the Nextdoor app.

The debt relief company has had minor legal issues in the past, but it has overcome those obstacles to become one of the most popular accredited debt relief companies online. Despite negative reviews, it’s clear that Freedom Debt Relief isn’t a scam. In fact, many Freedom Debt Relief clients credit the company for getting them out of debt and teaching them how to avoid future debt. You should always compare several companies before choosing a debt relief option, but this one stands out as one of the top debt management companies.

How Long Will It Take To Get Out Of Debt? It depends on how quickly you can build up your settlement funds and save for the settlement offers. The program length varies between 24-48 months, the faster you can save, the quicker you can get out of debt. If you only make the minimum payments on your credit cards, you could be in debt for the next 10-20 years and pay back 2x, 3x, or even 4 times as much as you originally borrowed.

If your expensive habit is smoking or drinking, that’s an easy one — quit. Alcohol and tobacco do nothing for you except stand between you and your long-term goals. If your expensive habit is slightly less incendiary – like a daily latte, restaurant lunches during work hours, or fast food — the best plan of attack is usually cutting way down with the goal of eliminating these behaviors or replacing them with something less expensive.
The other method is called laddering, which is Clark’s preferred method because it will save you the most money over time. The way it works is you list your debts, starting with the highest interest rate card first and end with the debt with the lowest interest rate. This method makes the most mathematical sense, because you will save the most money in interest over time.  Regardless of which process you choose, the key is to stick with it.

Imagine, for example, that you have $20,000 in credit card debt and $10,000 in other non-mortgage debt. You might set yourself a goal of paying it all off in two years. (Set a specific time frame, too, lest you keep extending your deadline.) You can set sub-goals, too, such as having a quarter of it and half of it paid off by certain dates. Write down the goals and post them where you'll see them.
For most people I would say that signing up for National Debt Relief is not a good idea. While on its face, having you pay no up front fees with the goal of making you debt free in 2 to 4 years sounds great.  However the truth is there may be better options which can accomplish the same goals for a lower cost and that have less of an impact on your credit and your sanity from being sued by a debt collector.  Debt settlement in my opinion is best suited for people who have already been delinquent with their debts and have lump sums to offer up front to negotiate settlements of 50% or less in many cases.  Otherwise chapter 7 bankruptcy or chapter 13 bankruptcy may be the best fit to eliminate debt or pay off debt over a 3 to 5 year repayment plan and avoid being sued by a lawsuit.
If you enroll with National Debt Relief they state that you can expect to save potentially 30% on average and that does not include paying taxes on debt forgiven over $600.  Additionally what they don’t mention is that to obtain a favorable settlement you will need to stop making payments on your debts which will increase you total debt in the short term, hurt your credit, and open you up to potential lawsuits and debt collection phone calls due to non payment.
Most of the major banks and card issuers are more aggressively offering their own debt reduction and settlement plans for unpaid debt and bills. It is in their best interest to do this as well. Not only are they cutting out the middle man, but they will also receive at least some payments from the customer, rather than nothing. Find a list of credit card company settlement programs.
The big downside is, if you need to leave your job for any reason, including if you're terminated, you must pay back the 401(k) loan quickly -- often within 60 days. If you don't, the unpaid loan is treated as a taxable distribution and you'd have to pay a 10% penalty. Not only can a 401(k) loan trap you in your job, but you could also hurt your retirement savings goals, because you'll have less money invested and growing. 
No. All eligible unsecured debt must be accounted for in a debt management plan, even those bills that you typically have no problem making payments on. The credit counseling agency in charge of your debt payment plan will want a full accounting of income and expenses in order to arrive at an accurate amount available to make the monthly DMP payments so be prepared to include all eligible debts.
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