Debt Management Services

Everyone wants to offer you credit “at the lowest rates” — from credit card lenders to banks, from home financers to healthcare, from the government to private businesses. Before you realize it, people accumulate debt without the means to repay it. This overwhelming atmosphere of accumulating debt can quickly spiral out of control. Debt Management programs provide sound reality checks to your overall debt situation and keep liability accounts in line.

What is Debt Management?

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.

What is debt management?
how does debt management work

How does It Work?

Debt management is the process of consolidating your debts into a single, more manageable payment. When you enroll in a debt management program, the credit counseling company will work with your creditors to lower your interest rates and monthly payments. They’ll also help you develop a budget and repayment plan that fits into your lifestyle.

The goal of debt management is to help you get out of debt within a reasonable amount of time, while keeping your finances as stress-free as possible. If you’re struggling to keep up with your bills, or if you’re dealing with high interest rates and unmanageable monthly payments, debt management may be the right solution for you.

Do You Need Debt Management?

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.

  • $90K – Average annual personal debt of each American citizen

  • 87% – Of families suffer from high consumer debts

  • People ages 40-55 are most vulnerable to burdens of excess debt

  • 39% – Of Millenials fear being forced to work beyond retirement

benefits of debt management

Benefits of Debt Management

The benefits of debt management include lower interest rates, decreased monthly payments, and improved credit scores.

Debt management can help you get your financial life back on track. When you work with a debt management company, they will negotiate lower interest rates with your creditors and put together a repayment plan that fits within your budget. This can save you money on interest payments and help you get out of debt faster.

Your credit score is also important for your financial health. A high credit score means you qualify for better interest rates on loans and mortgages and can save thousands of dollars over the life of a loan. Debt management can help improve your credit score by showing creditors that you are taking steps to get your finances under control.

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:

  1. 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 .
  2. If it’s anywhere between 15% – 39%, then approaching a credit counselor makes sense.
  3. 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).
  1. Debts don’t vanish overnight. You need to invest in a long-term commitment of an average of 3-5 years towards your DMP.
  2. 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.
  3. Failure to comply will inevitably take away all the creditor concessions you gain from the DMP. Late fees and penaltiesmay also incur.
  1. Choose a plan that is affordable to you.
  2. Ensure that you have a steady income to pay your installments.
  3. 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!