Debt Management Consultants

The growing number of debt management consultants reflects the growing problem of consumer debt in this country. Unlike past generations, today's consumer often has a buy it now, pay for it later philosophy. The problem is compounded by easy access to high limit credit cards and even the push to take out home equity lines of credit (HELOC) to spend on items other than the house. Overall, we are a nation with a negative savings rate. This is a troubling situation when one of the largest generations in the nation's history, the multitude of baby boomers, is now reaching retirement age. Too many are financially unprepared for their golden years. Instead of relaxing on the golf course, traveling to foreign places, or living out other dreams, too many older baby boomers are forced to continue working because of too much debt and not enough of a nest egg. Many may need to seek the services of debt management consultants to help them out of a bad economic situation.

Many younger people are also drowning in debt. Financial experts note that young couples want to have the same standard of living as their parents, but are too impatient or just don't realize that it took their parents years and years to reach that level. The number of people who jumped into buying a home before being financially prepared to do so is staggering -- and now the monthly house payments on their variable rates subprime mortgages are so high that they are defaulting on the loans. The expertise of debt management consultants may help families facing a possible foreclosure make a prudent decision on how best to handle the situation. Since circumstances can vary, a knowledgeable professional can assist with relevant advice and access to additional resources for the financially-strapped homeowner. The huge number of subprime loans, too freely granted to borrowers without the resources to make the payments, has created a ripple effect throughout the nation's housing market and lessened property values in neighborhoods across the country.

There's an old bumper sticker saying that says, "I owe, I owe, so off to work I go." We chuckle at the little rhyme, but it's so true for numerous individuals and family. Solomon, the wise king wrote that: "The rich ruleth over the poor, and the borrower is servant to the lender" (Proverbs 22:7). Owing money enslaves people to jobs they hate and limits what they can do with their paychecks. Credit card debt is a major problem for many individuals and families. Some people find themselves in the horrible economic position of getting a cash advance on one card to make payments on another. This is a very unwise thing to do, but conscientious people often prefer doing something like this rather than not making a payment or making a late payment. Such individuals are concerned about keeping a high credit score and the fear of any black marks against one's credit history may lead to making financial mistakes. Here again, debt management consultants can provide needed assistance in helping consumers understand that compounding a problem doesn't solve a problem. Of course, the more usual scenario is that credit card debt keeps growing because the minimum payments put scarcely a debt in an account with high interest rates and continual usage. When the time comes that the credit card limit is reached and new offers are no longer available, the consumer has little choice but to seek the assistance of debt management consultants to help straighten out the mess.

When collection agencies and creditors start calling, many consumers just want to throw a blanket over their heads and hide. Just the ringing of the telephone causes tension and fear. It's not unusual for indebted consumers to feel embarrassed, angry, and frustrated. Collectors understand this and can be downright bullies in attempting to manipulate the debtor to provide the account numbers for checking and savings accounts. With that information, the collection agency can take withdrawals directly from the account. Sad to say, but collection agencies are often dishonest in their practices. They may tell the consumer that a certain amount will be withdrawn, but then take out even more than the agreed-upon amount. Consumer advocates usually warn against giving banking account information to creditors. This is an instance when debt management consultants can be extremely helpful. A professional consultant is removed from the emotional feelings of anger and embarrassment. She can contact creditors directly and negotiate lower interest rates or a lower pay-off amount on behalf of her client.

Before contacting debt management consultants for assistance, a person may want to contact his creditors by himself. But this step should be taken before the creditors start calling him. As soon as the situation becomes obvious that monthly obligations cannot be paid, the prudent individual should call the creditor and explain the situation as clearly as possible. The creditor may have processes in place that will help individuals over a rough spot. But if the situation has become so intense that phone calls aren't answered for fear of whom may be calling, then the consumer should not be embarrassed to seek outside assistance. Consumer advocates suggest shopping carefully for reputable debt management consultants so that individuals aren't hit with a financial scam when they are already economically vulnerable. Debt consultant companies should be researched both online and with the Better Business Bureau. Financially-troubled individuals may be able to receive assistance through government programs.

Add to: File Insurance Business article Teen Photo Images