Debt Consolidation Questions and Answers
Consumers are finding themselves in more debt than usual due to financial situations that have hit all Americans. Most consumers are looking towards debt management programs for help. Below are some frequently asked question that most consumers have when inquiring about debt management programs.
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What type of debt can I consolidate?
When doing debt management programs one can include most debts. Debt being consolidating must be unsecured such as credit cards, unsecured loans, collections, medical debt and more.
How long does debt management programs take?
This usually depends on how high ones debt balances are. Debt programs usually take anywhere from 12 to 48 months.
What will my interest rates be in a debt management program?
This would depend on what type of creditors one has. All rates are pre negotiated and depending on which creditors are owed will depend on the interest rate that is offered. Interest rates are almost always lower than the original interest that one has.
Is debt management a loan?
No, when doing debt management one is not receiving a loan. Getting a loan would just accumulate more debt. Consumer credit consolidation is a program to get one out of debt by negotiating a more reasonable way of making payment without outstanding interests.
Will debt management harm my credit score?
No, debt management is the only debt service that does not harm ones credit score On the contrary debt management in time will improve one’s credit score. This will be due to balances going down and interests being lowered.
Can I still use my credit cards after I have enrolled in the program?
No creditors want the consumer to close the account in order to be accepted in the program. In most cases all debt does not need to be included. Some consumers may opt to keep one credit card for emergency purchases only.
Is debt management confidential?
Yes, debt management programs are private and not known publicly. Any reputable debt management company will take measures to ensure privacy to each consumer that enrolls in the program.
What if I am not happy and want to cancel the program?
Consumers that enroll into debt management are usually happy with their new situation. Any reputable company will allow the consumer to cancel at any time. Most companies do charge a cancellation fee for services rendered.
Will debt management put my home in jeopardy?
No, debt management programs are to help the consumer not harm them. Debt management is for unsecured debt not secured debt which would be your home. Keeping up on ones mortgage would be their responsibility and have nothing to do with the debt management program.
How is it determined what each creditor will be paid each month?
As with interest minimum payments are also pre negotiated. It would be determined by what creditors one has. Each creditor is different and may want different amounts per month. This is something that should be provided to the consumer after an analysis has been ran.
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