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Debt Management Explained from DebtHelper.com on Vimeo.
There are plenty of reasons why we can fall into credit card debt, and it’s not always about our spending habits. Loss of job, loss of income, divorce, medical bills and other unexpected emergencies can drive us to use our credit cards more than we’d like. Soon we find ourselves struggling with credit card debt, finding it harder and harder to just make the minimum payments.
And just making the minimum payments isn’t a solution. Even if you never use a card, it can take between 15-25 years to pay off a credit card balance when you’re only making minimum payments.
If you’re ready to take positive steps to get your credit card bills under control, and pay off your balances, a Non-Profit Management Plan might be for you.
The first step in getting on a debt management plan is a one-on-one debt and credit counseling session with our Certified Credit Counselors. We’ll help you look through your finances, and analyze your spending and saving patterns. This helps us to understand how you’re accumulating debt, and how you can create a balanced household budget.
If we agree that it’s right for you, we will contact your creditors, and help you establish a debt management plan. We work with your creditors to lower your interest rate, and let you pay off your debt on a fixed monthly schedule.
Most Debt Management Plans take from three to five years to complete. Instead of paying multiple creditors, you simply send us one monthly payment, and we make sure that your creditors are paid.Your credit cards are cancelled at the beginning of the debt management program, and at the end of the payment period, your debt is paid in full.
A Debt Management Program allows you to:
Save thousands of dollars.
Lower your monthly payments.
Lower or eliminate your interest rates.
Stop your late fees or over the limit fees.
Consolidate your credit card payments into one monthly payment.
Stop creditor calls
Avoid personal bankruptcy.
Debt Management Plans are regulated at the National level. Interest rate reductions are fixed, and every dollar that you pay to your creditors through a debt management plan goes toward your balance
Assume that you’re carrying $10,000 in credit card bills at 14.9% interest. If you pay the monthly minimum at the average rate of 2.5% of your balance it will take 32 years to pay your balance, and you’ll pay $9,629 in interest. That’s almost as much as you currently owe.
| Interest Rate | 25% |
| Minimum Monthly Payment | $300 |
| Estimated Number of Payments | 383 |
| Total Interest Paid | $21,953 |
With management help, those numbers look a lot different. While you’re starting with the same $10,000 in credit card bills, but instead of paying 14.9% interest, you could pay as little as 1.9% interest*. Because your plan is structured, you pay $178 a month for 5 years, and at the end of that time, you are paid in full. At the end, you’re also saving over $20,000 in interest.
| Interest Rate | 5% |
| Minimum Monthly Payment | $200* |
| Estimated Number of Payments | 57 |
| Total Interest Paid | $1,237 |
*Please note: Interest rate deductions are fixed and dependent on the creditor.
Not sure how the Management Plan works? Learn how CCMS can save you money each month in this 1-minute video
DebtHelper.com is licensed, insured and complies with all state licensing requirements to ensure mandated regulations are followed. DebtHelper.com can currently accept clients from all U.S. States except for Kansas, Montana and Utah. Until we are licensed in your state, DebtHelper.com will be happy to refer you to another qualified agency. Please call (800) 920-2262 if you have any questions. Our consultations are free, call us any time. The Debt Management Plan Payoff Calculator is an estimate. Contact us for more specific terms.
