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Do Debt Management Plans Work?

Debt. It’s a burden that many people in this country share as they navigate life. In fact, according to Experian, 95% of adults in the country have a credit card open in their name while 75% of those have a card balance greater than $0, with the average being more than $5,000 as of 2020. What this all means is that you’re not alone. But now might be the time to take control of your fiscal health.

Having more than $5,000 in credit card debt puts you in a higher risk category of letting it get out of control. Don’t worry, you have options, and it doesn’t necessarily involve declaring bankruptcy, which can leave a mark on your credit for up to 10 years. Instead, make an appointment with a credit counselor, who can then assess whether you’re a good fit for a debt management plan. If you’re wondering, do debt management plans even work? We have answers.

The answer, quite simply, is yes. Debt management plans are designed so that you can pay off your debt quickly—within three to five years. Credit counselors are trained in a variety of financial counseling areas and will work with credit companies to lower your interest rate, which can significantly reduce the amount you owe, and work out a monthly payment plan that is affordable and right for you. And it’s not just about credit card debt, though it’s the most common debt that drives people into the financial hole. Debt management plans work with all unsecured debt, including medical bills and personal loans. 

The benefits at this point are obvious—instead of multiple payments each month you’ll pay one, affordable fee while paying less interest in a faster amount of time than you ever thought possible. With regular on-time payments, your credit score will go up, you’ll be debt-free faster, and you’ll have learned healthy financial habits in the process. 

With a debt management plan, you won’t have to worry any longer about rising interest rates and payments each month. Deciding to enroll in a debt management plan can rid you of credit collection attempts. However, always remember these tips—always make your payments on time, continue to budget, and enjoy the journey as you embark on a life with at least one less burden holding you back.