DO You Need Debt Management?
|$90k+||87%||40 – 55||39%|
|Annual Personal Debt of each American citizen||Suffer from high Consumer Debts||Most vulnerable to burdens of excess debt||Fear of being forced to work beyond retirement|
Racking up debt is not so uncommon in today’s society. We are so used to accumulating debt, it is practically invisible to us and has become a part of our daily lives. In fact, not having a lengthy credit history can hurt your chances to qualify for potential future loans.
While these small, accessible, and convenient debt options (credit card purchases, personal loans, EMIs, etc.) look harmless at the beginning, they compound over time. And often, these unchecked unsecured debts stretch your finances thin and cause mayhem on all fronts. That’s where proper Debt Management comes in!
At Roundleaf, we thrive in obliterating your financial stress by handing back your financial control. We show you the perils of over-burdening debts and teach salient ways to overcome them – become 100% debt-free.
What is the Debt Management Process?
Debt management is NOT a loan. It’s a systematic approach to clearing your debts in a given time period and involves several steps.
While you apply for any debt (whether it be credit cards or loans.), you will receive an agreement from the creditor laying out the details of how to repair the debt. This document is your Debt Management Plan (DMP) for that particular debt.
A DMP can be drawn between a debtor and a credit counseling agency when multiple debt accounts are involved.
Things to Consider Before Opting for a Debt Management Plan
While DMPs are a great solution to resolve your debt problems for good, it is not for everybody. Basic considerations include the cost-to-profit ratio, risk tolerance, and patience for the long-haul. Before applying for Debt Management, you first need a YES for all the questions below:
- If your unsecured debt is below 15%of your annual income, you can consider yourself in a pretty good area that you may be able to handle .
- If it’s anywhere between 15% – 39%, then approaching a credit counselor makes sense.
- Debts beyond 40%of your annual income require extensive help in order for you pay off that amount of debt within five years (the average period for which DMPs are set).
- Debts don’t vanish overnight. You need to invest in a long-term commitment of an average of 3-5 years towards your DMP.
- Committing to a DMP requires discipline over your financial activities, closure of unnecessary debt accounts (credit cards). You also cannot open new lines of credit during the plan.
- Failure to comply will inevitably take away all the creditor concessions you gain from the DMP. Late fees and penaltiesmay also incur.
- Choose a plan that is affordable to you.
- Ensure that you have a steady income to pay your installments.
- Keep enough buffer to sustain your day-to-day activities for a minimum of 3 years.
Take up the 100% Debt-Free Commitment at Our Reset Program
Learn to create a monthly payment calendar, decide priorities of debt payments, negotiate collections and charge-offs – and a lot more useful debt management tips from Roundleaf’s Reset Your Debt program. Sign up today!