Debt management is an effective way to get out of debt. However,there are unforeseen circumstances that will require you to change tactics in the midst of a program. It can be in the form of a sudden financial crisis that renders you unable to meet the current demands of the debt relief program. Or it can be due to a wrong assumption on your financial analysis. You may have realized that you cannot meet the payments and service fees associated with debt management plans.
If you find yourself unable to keep up with your current program,you can change it. Most of the time,people shift from debt management to debt settlement. Here are some of the things that you should do when shifting plans.
First of all,you need to inform the debt counselor involved in your account. Discuss the sudden turn of events that led you to decide that you need to shift to debt settlement. Before you finalize the transfer,be open to any suggestions from the counselor. They may be able to help you negotiate with the creditor for an even lower monthly payment scheme. Creditors will definitely prefer that you pay off your balance completely instead of the reduced amount that debt settlement aims for. Not only that,it will serve you best to stick with this program since it has a less negative impact on your credit score. But if you find no solution,then they have to let you go.
Check if they also offer debt settlement programs. There are companies who offer a variety of debt relief programs to be able to cater to a wider market. If they do,you can stick with that company as they already have your records. The shift will be a lot easier and faster.
If they cannot offer you settlement services,the counselor’s next step will be to get in touch with your creditors. They have to let your creditors know that you have terminated your program with them and have sought other options to pay off debt. Before you severe ties with the debt management company,be sure you get the updated report so you know how far you have gone with your debt payments. This is something that you can show the debt settlement company that you will transfer to.
Shifting debt relief programs illustrate the importance of knowing your options. Do not stick to program just because you already started it. Be honest if you can no longer afford the payments required by the program you are in. Remember that there is no single debt relief formula. Not only that,there are unforeseen circumstances that can limit your finances even further. It can all change without warning. Just be cautious about your finances,practice proper management and be wise about how you spend. Make a budget and payment plan that will help you monitor and decide if your current program is still effective. If not,do not be afraid to change it.