DEBT CONSOLIDATION AND DEBT MANAGEMENT, PART 1

are you determined to take action on your debt problem, but you also are looking carefully before you take a leap into a solution. Your best option for taking care of your debt will depend upon how much income you have available after expenses to satisfy your debts. Any solution will need to be acceptable to you and your creditors. Creditors typically have a minimum amount they will accept either for debt settlement or in a debt management plan. If you can't come up with the minimum, then you may have to look into more severe and damaging options. Let's get started.

My recommendation is to begin by contacting a qualified credit counselor at NFCC.org or AICCCA.org. These nonprofit credit counseling agencies will provide you with a thorough review of your finances. After the financial review, your counselor should give you a budget detailing your expenses and what you can afford to pay each month toward your debts. They will also give you a written action plan with alternatives. This should be free of charge. Options may include whether you would qualify for and benefit from a debt management program or if you would be better off following a different action plan.

If you have enough income to afford to repay your creditors in a debt management plan but not enough to handle repayment on your own, this may be the best option for your credit. Your accounts will be noted as being part of a debt management plan in the description section of your credit report. This does not count against you when calculating your credit score. Lenders report accounts involved in a debt management plan in a wide variety of ways. Some report it negatively; some bring you to a current "good" status faster with a debt management plan to encourage your participation. Ask how your creditors will report to the bureaus