Debt Management ProfessionalsWritten by Jill Morrison
Debt management professionals are trained to provide education and support about financial problems. They offer services to help individuals become debt-free and repair damage to their credit records. They also offer counseling to determine customized plans that will provide the greatest results. Special attention must be given to emotional problems as well as financial problems involved with heavy debt.
Strategies of Debt Management Professionals
Consumer credit counseling services are available free of charge to those individuals who qualify for hardship programs. Usually, a minimum unsecured debt of $2,500 is required for participation. Once accepted into the program, monthly payments and interest rates are reduced. Late fees are waived and collection calls are directed to a service agency. Debt consolidation advice is also provided. It is usually not wise to switch an unsecured debt to a secured debt such as a home equity loan. This would put individuals at risk of losing valuable property.
Those who have access to cash may enroll in debt settlement programs that reduces the amount owed in exchange for immediate payment. Typical savings would be 50 percent, sometimes as much as 60 percent. Professionals are skilled at negotiating with creditors. They also provide expert advice about legal and tax ramifications of debt settlement. Reduction of a debt is considered taxable income by the Internal Revenue Service.
Reputable debt management professionals may be found online. You can check for any record of consumer complaints through the attorney general's office or the Better Business Bureau. The Consumer Federation of America reveals that approximately nine million people seek credit counseling each year. This option helps people to repair their credit reports and live debt free without filing for bankruptcy.