Debt Repayment Program

Using a debt repayment program can be a family's real opportunity to escape the vise-like grip of money obligations. With very dark economic clouds on the horizon, more and more individuals and families will be facing dark times and those with large credit deficits will be impacted the most. The relief that a debt repayment program can offer has its positive and negative features but in the end, all unsecured debt can be wiped out within five years. This worthy goal is wholly dependent upon the client's ability and commitment to stay with the program and add no more obligations to any new or existing account. Finding an agency that offers a repayment program is not difficult. Many online companies and non-profit agencies are ready and willing to assist anyone who needs information, encouragement and a plan.

A credit counseling service is the provider of an industry wide program for struggling debtors. These companies and non-profit agencies will differ in the fees charged and the individual attention given to the client after the genesis interview and plan initiation. Some bad press has been generated in recent years regarding some companies that offer a debt repayment program, but usually non-profits are a good choice, although they will also make some money from their clients during the process. A monthly fee, included in the consolidation payment, will typically go to the program provider but some counseling services may actually charge less. It will definitely pay to have a 360 degree look at all prospective providers. The people that abuse others through shady business practices may seem to be untouched by the law, but Jesus said a day is coming when all of men's secret and unpublicized evil schemes will be revealed. "Fear them not therefore; for there is nothing covered that shall not be revealed and hid, that shall not be known." (Matthew 10:26)

The pride factor can often get in the way of seeking assistance with a debt repayment program. When two people are struggling in the water and a Coast Guard cutter comes alongside to help, a life saving ring attached to a rope is thrown to each of them. For the first person, it's a God send and he happily latches on and is towed to safety. The second guy has told everyone he is a natural swimmer and could have beaten Michael Phelps if given the opportunity. The life saving offer has become a pride thing and so two Coast Guard members have to jump in the water and rescue this egocentric maniac who really is drowning. Some people call and get relief and others can't admit the problem until it reaches critical mass where different collectors are calling eight times a day and the husband and wife are ready to scratch each other's eyes out. Not endorsed, by the way.

The plan is the same everywhere and begins with the all important first interview which can be done over the phone. Taking fifteen or twenty minutes, this conversation between the client and counselor covers everything financial about the client. Income, every expense incurred, every credit card company and account numbers. In some cases, a copy of tax returns may have to be provided for income verification, or at least copies of W-2s. The debt repayment program is a voluntary, no contract agreement between client, counseling service and all non-secured loan providers. It does not cover installment loans such as car payments, mortgages and other collateral based lending agreements. Additionally, tax payments and students loans, both government based, are not eligible for a debt repayment program.

Most credit counseling services can craft a debt repayment program in such a way that the client who has one thousand dollars a month in revolving credit account payments will have at least an extra four hundred dollars a month in income a month. This income is the result of the service petitioning the creditor(s) to lower the credit card interest rate down into single digit figures from the probable twenty-five percent range before. All of the credit card loan payments are consolidated into one single payment and sent to the counseling agency where the funds are disbursed and the client receives a monthly statement from each creditor to verify that debt is actually beginning to shrink. If the client has the discipline to take some of the extra income money and apply it to the account with the highest interest rate, the five year repayment plan can actually become a four year plan. But therein lays the one-eyed ogre.

A debt repayment program with a credit counselor is a voluntary agreement and the client can pull out at any time. The reality is that clients are more often undisciplined users of credit privileges and when the liberation of having more money in the account each month occurs, the excess is squandered on excesses. Only about forty percent of all clients ever finish a plan, a tip off to the unstructured nature of so many credit debtors. Not finishing a plan or using one of the negotiated credit card accounts during the program life can cause lenders to immediately raise interest rates back to the original level and will begin the crunch all over again. Lenders are very reluctant to allow a client who has abused the program's requirements to begin the program again for the foreseeable future. Having the grit of John Wayne and the vision of the Founding Fathers will be needed to have a successful program that really will see that mountain become a molehill.

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