How Does Refinance Work?

Federation To Protect
3 min readAug 12, 2016

--

Many people are currently struggling to manage and eliminate debt. They may make their monthly payments on time, but their balances still stubbornly refuse to go down as they continue to incur more and more late fees, interest charges, and over limit fees as they just keep piling up. Under these seemingly hopeless conditions people in debt often feel as if they’re running on a debt treadmill- working tirelessly, and making precious little progress.

Anyone with severe debt may be able to qualify to enroll in a Debt Management Program (DMP). A DMP is a systematized method of helping persons with high debt to pay down what they owe via regular monthly payments to a credit counseling agency. The credit counseling agency will distribute these payments to the entities, organizations or persons the debtor owes. Those who qualify to participate in such a program can benefit from the reduction of fees, finance charges- or the waiver of these charges, and receive fewer collection calls.

If you would like to eliminate your credit card debt and the stress that comes with it, you can find debt relief through a well-structured DMP. If appropriate for your situation, an advisor will speak with your creditors to discuss the mutually beneficial terms of a possible DMP. Your Debt Management Program may:

· End harassing collection calls

· Decrease your interest rates

· Lower your monthly payments

· Waive various fees

Who offers Debt Management Plans?

There are a number of organizations that offer free debt advice and can arrange a DMP to help ensure that all of the money participants pay will go toward paying off the debt. That means those laboring under heavy debt burdens could be free of debt sooner than expected. Debt advisers offer free expert debt advice to many thousands of people in desperate financial situations each and every year. If you are struggling with debt, they understand your predicament. Such organizations are well trained and can give you the right support to manage, lower, and eliminate your debt.

If you opt to seek the advice of a fee-paying provider, you should know that all DMP providers are required to be authorized and licensed by the Financial Conduct Authority (FCA) in order to be certain that they meet the necessary standards. Before agreeing to start a plan with any fee-paying provider, check to be certain that they have been properly authorized.

How Long Will my DMP Last?

Most DMPs take roughly 36 to 60 months to complete depending on the participant’s financial situation. The participant’s accounts with their creditors will be credited at all times with 100% of the total amount that they pay via the NFCC member agency. These debt management payment programs work in two ways to help everyone involved; they help debtors pay what they owe in a way that is manageable for them, and they make it possible for the creditors to receive the money they are owed.

What debts can be Paid with a DMP?

A DMP can only be used to pay non-priority debts such as:

· credit cards, payday loans, or store card debt

· home or in-store credit debts, uncatalogued debt

· overdraft debt

· building society or bank loans

· personal loan debt

· debt owed to friends or family

Which debts cannot be paid with a DMP?

You may not use a DMP to pay priority debts such as:

· rent, loans secured against your home or a mortgage

· Income Tax or National Insurance

· utility bills

· child support and child maintenance

· court fines

For individuals with significant debt problems, speaking with a financial counselor is an appropriate first step to better managing troubled finances. If it is deemed appropriate, such a person may enter into a DMP that can help to start debtors down the road to financial stability and peace of mind.

*This article provides broad and general guidelines and does not constitute professional or legal advice. You should not use this article as a substitute for your own judgment, and you should consult professional advisers before making any advertising, tax, legal, financial planning or investment decisions.

--

--

Federation To Protect
Federation To Protect

Written by Federation To Protect

The Federation To Protect is a non-profit organization created with the purpose to provide responsible options to ensure consumers’ trust.

No responses yet