It’s all too easy to get into debt, especially if you’re raising a family. However, just because you’re in debt today doesn’t mean you’ll be in debt forever. By reviewing this Action Plan, you are taking the first step toward debt relief. Follow the steps in this Action Plan to get started, whether you’re in serious debt or just want to pay off some expenses.
A debt management plan (or DMP) is a structured debt payback program administered by a nonprofit credit counseling firm that does not require a loan. MMI works with creditors to reduce interest rates and create a monthly payment that is convenient for you. This speeds up debt payments, saves you money, and usually results in a higher credit score once your program is completed.
There are no requirements to be qualified for a debt management plan. Clients merely need to review their debts and budget data with an NFCC-certified credit counselor to see if they can benefit.
Debt management will make the process go more smoothly.
Reduce your levels of anxiousness.
Consolidate your bills into a single monthly payment without taking out a loan.
- To save money, take advantage of falling interest rates.
- Increase the rate at which you pay off your debts.
- Make sure you’re financially secure.
- Make no further collection calls.
We can help you become organized and start making real progress if your bills are taking up too much of your time, money, and mental well-being.
Read more about the Finance skills
1. Create a financial inventory of your own.
Knowing how you went into debt will aid you in determining the best methods for getting out. Find out what you own, how much money you spend, and what you owe. This might assist you in determining how to save money in critical areas so that you can pay off your obligations more quickly. To get your financial inventory started, go over the action steps for establishing your net worth, tracking your costs, and creating a spending plan.
2. Keep your credit card usage to a minimum.
Stop using your credit cards as soon as possible if you find yourself in debt. Tips on how to live without relying on credit cards all of the time can be found in the Control Your Credit Action Plan.
3. Before you skip a payment, call your creditors.
Contact the company you owe money to and request a payment extension if you believe you will be unable to make a payment. If you call the company before you miss a payment, they are more likely to work with you.
4. Speak with the members of the financial guidance team at your installation.
They can investigate your circumstances and give recommendations to assist you in becoming debt-free. They can also put you in touch with local organizations that can assist military personnel and their families. Any debt management plan service provider is a wonderful choice to think about. Because these companies or service providers will recommend a good plan for your debt, it will be a better solution in repaying your debt.
5. Consider contacting a non-profit debt counseling agency for assistance.
Your local Family Services or Support Center can help you locate one. You can also discover a credit counselor in your area by calling the National Foundation for Credit Counseling.
6. Pay off any debt that has a high-interest rate first and get out of debt.
Prioritize paying off the credit card or loan with the highest interest rate. Set a monthly goal to pay a certain amount toward that debt each month while paying the minimum on your other credit cards or loans. Once the high-interest debt is paid off, apply the extra payment to the next-highest-interest obligation. You’ll finally pay off your obligations and save a lot of money on interest.
7. Pay off your debts and bills as quickly as feasible and get out of debt.
If you’re paying your credit card bill by mail, send your payment well ahead of the due date (at least a week). This is an important point to keep in mind. Payments must be sent to your account by a certain time on your due date, or you may be charged a late fee, according to credit card companies. Make careful to mail your credit card payments ahead of time so that they can be posted to your account as soon as feasible. Find out when a payment you made over the phone or online will post to your account.
You should make your payment a day or two before the due date because some organizations require a day or two to process your payment. Late payments can cost you a lot of money (usually $30 or more) and have a negative impact on your credit score.
8. Avoid any scams involving settlements or credit repair at all costs.
When it comes to getting out of debt or restoring a bad credit history, there is no quick remedy. Avoid companies that demand upfront payments or “voluntary donations,” as well as those who claim to be able to wipe your debts clean or that you would pay pennies on the dollar. If they instruct you to stop talking with creditors, or if they request personal and credit card information before giving you information about their services, or if they want to enroll you in a debt management plan without first examining your position, be wary.
9. Bankruptcy should be used only as a last resort.
Some people assume bankruptcy is their only option when their debts become too much to bear. Service personnel, on the other hand, may have a variety of additional options. If you’re considering bankruptcy, go to a financial counselor at your local Family Services or Support Centers first. Bankruptcy should only be considered as a last resort because it has long-term consequences and may not provide you with the debt relief you need.
To sum it up
Finally, I’d want to highlight that the above description is a full and comprehensive method for rapidly and painlessly getting out of debt. Your debt-reduction path will be simple and convenient if you follow these guidelines. This stage will result in a better debt arrangement since it makes debt management easier and more understandable.
