Free debt management is a useful service that allows people to manage and eventually get rid of debts accumulated over months and years. Each organization offering this service goes about managing your debts in different, unique ways, and it is you who has to decide which service will prove most beneficial to you.
Since the service is labeled as ‘free’, it implies that each dollar you pay from your pocket goes towards clearing your debts, and there are absolutely no administration charges or set-up and deposit fees. In addition, these services are provided by counselors who volunteer to do so. Most debt management companies offer their advice and services via telephone, email and post. This is an added advantage as it saves you repeated trips to their offices.
There are various options you can avail of in order to manage your debts. The first is to take the help of an organization that provides a hands-on approach in managing your debts especially if your financial situation is grim. The members of the organization draw up a debt repayment plan under which you are required to deposit money once a month into a trust account. Each month, you end up making one payment, while the service looks after clearing off the remaining expenses. The organization also tries to persuade your creditors to lower the interest rates and monthly repayments.
Then there are the no fee counseling organizations. They too start off by examining in detail your exact financial condition, especially your cash in-flow and outflow. Based on this, they advise you as to how to manage your expenses. They draw up financial guidelines and expect you to follow them religiously. They also provide useful insights into financial management, so that you learn to manage finances well. These counseling organizations also speak to your creditors, and try to negotiate a better repayment plan.
The third are the charity services. As the name suggests, these services work on a purely non-profit principle. The counselors examine your personal situation, and draw up a plan to help you manage your budget better. These organizations offer only personal counseling. They don’t contact the creditors with requests to lower your monthly repayments.
However, all these services can prove useful only if you listen to them, and change your spending patterns. This is the only way you can make your life debt free.