Will Debt Management Help You?
New Mexico residents, like many people across the country, are up against high interest credit cards and other unsecured debts such as retail store cards, gas cards, medical and doctor bills, and more. Mounting credit card debt is, unfortunately, a distressing reality for many consumers and if you do find yourself in the same situation, you may be searching for information regarding debt management programs, or debt management plans (DMPs) coordinated by credit counselors or debt counselors. In addition, you may also be considering alternative debt relief options such as debt settlement, debt negotiation, or even bankruptcy. It's important to compare and contrast the differences between these debt relief options and understand their role in helping to provide relief for consumers experiencing financial hardship.
Credit Counselors Customize Debt Management Plans
These days, many consumers who are overwhelmed with credit card debt are exploring popular debt relief options such as debt consolidation through a credit counseling agency, or what's commonly known as a debt management plan (DMP). Consumers who want to combine or consolidate their high interest credit cards and other unsecured debts into one affordable monthly payment may want to examine a debt management or credit counseling program. By taking advantage of the benefits of debt relief, such as the lowering of interest rates and the waiving of late fees and penalties, a debt management plan coordinated by a credit counselor or debt counselor is created to help consumers save a considerable amount of money and get out of debt on an accelerated timetable.
If you are experiencing a financial hardship and need to explore your debt relief options, you can get your free debt relief evaluation and savings estimate at no obligation.
Debt management plans are specific to each individual or family. Typically, credit or debt counselors will meet or speak personally with individuals experiencing financial hardship. They will verify how much debt the consumer is facing. They will then gain a good understanding of the consumer's income level and how much money the consumers can realistically allocate each month to pay down or payoff debts. Finally, they will design a customized debt management plan that calls for the individual to temporarily stop using credit cards and make one consolidated payment each month to the credit-counseling agency that will then be distributed to creditors one by one. However, before this plan can be finalized, it must be submitted to the individual creditors, requesting that they agree to extend the benefits of debt relief to the consumer in need. These benefits might include:
- Lowering Monthly Payments
- Reducing Interest Rates
- Waiving of Late Fees and Penalties
- Consolidating or combining debts into a single, more manageable, monthly payment
- Helping you save substantial money and allowing you to get out of debt in less time than you could on your own if you were to continue paying only the monthly minimum month after month at higher interest rates.
Creditors who agree to the proposals submitted by credit or debt counselors are then added to the debt management plan. For those creditors who don't agree to extend the benefits of debt relief, consumers must still adhere to the original terms of their cardholder agreements.
Consumer credit counseling agencies, by utilizing certified credit counselors or debt counselors, can also provide a variety of other debt relief services, including help with budgeting, developing good spending habits, financial education and more. Credit counseling agencies that are truly exceptional will always include a strong educational component to their program. They will do more than help the individual or family get out of debt; they will also help the consumer get to the bottom of their debt crisis and give them the tools and knowledge needed to put an end to their recurring debt.
If you need relief from credit cards or other unsecured debts, you can get your free debt relief evaluation and savings estimate at no obligation.
Debt Management Saves Money Through Commitment
Many residents of New Mexico have turned to consumer credit counseling solutions for help. While it is a tried and true method of debt relief, debt management also requires basic financial discipline and restraint to avoid using credit cards. Consumers must also make their consolidated monthly payments on time and make an overall commitment to remain on the plan's course. It normally takes three to five years to complete the program and realize the full benefits of debt relief. That may seem like a long period of time, but just a few years of discipline to get on track financially can save many stressful years of heartache, especially when faced with the prospect of a lifetime of debt.
The bottom line: Debt relief services do not make debts magically disappear, but they have provided welcome relief and helped countless individuals and families get off the debt treadmill and get on the path to a financially free life!
New Mexico Financial Aid Programs
In addition to federal economic relief aid, New Mexico also has a variety of programs available to help consumers in need of relief. As is the case with the federal government, the state does not have specific credit card relief programs, grants, or consolidation loans to help consumers pay off their credit card debt obligations.
However, for individuals who are experiencing financial troubles - including low income families, the elderly, and those needing medical assistance - the state does offer several areas of support. These programs can help New Mexico residents in need of food, medical assistance, housing assistance and help paying utility bills. The state of New Mexico has a variety of financial assistance programs available, to learn more about these resources, go to the state's Human Services Department official page Looking for Assistance section.
Alternative Debt Relief Options Are Available
In addition to debt consolidation through a credit counseling agency, another popular debt relief alternative among consumers is debt settlement or debt negotiation. Debt settlement is more commonly used by individuals and families who have high interest, high-balance credit card debt and seriously considering bankruptcy. It is a more aggressive form of debt relief that has helped consumers get out of credit card debt faster, assuming the consumer can accumulate money in a "set aside" account which can later be used to extend a settlement offer to creditors. It's important to understand the difference between debt settlement and debt management: With debt management you are essentially paying off everything you owe, but saving money through much lower interest rates and a waiving of late fees and penalties. In the end, the main purpose of debt settlement is to "settle," or negotiate with, credit card companies for substantially less than the full amount you currently owe.
There are scenarios in which credit card companies may want to "settle" with consumers. If credit card companies eventually decide to "sell off" accounts that are 60, 90 or more days late to a collection agency, creditors may get as little as 10 cents on the dollar. Under those circumstances, credit card companies may be willing to accept a reasonable settlement offer made by you or by a debt settlement company negotiating on your behalf. It is important to recognize that money saved through credit card settlements is subject to federal taxation. In addition, when consumers default on their credit card agreements in order to set aside money in a settlement fund, creditors may threaten or take legal action. Finally, debt settlement will generally have a negative impact on personal credit, but the impact of personal bankruptcy will be more serious and last longer.
To compare your debt relief options and see how much you could save, take a moment to answer a few basic questions so that we can connect you to a BBB-accredited debt relief provider who may assist you. Before you enroll in any accredited debt relief program, you need to understand clearly how much debt relief can potentially save you, how long it will take to realize those savings, and the impact that any debt relief program could have on personal credit and taxes.
To learn what debt relief could do for you and get an estimate of how much you could potentially save, take a moment to answer a few questions online. Get your free debt relief analysis and savings estimate online.