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What Can I Expect During a Debt Management Plan?

Debt Management Plan Infographic - Get out of consumer debt

If you're falling behind in your creditor payments and receiving collection calls, a debt management plan might be a good option for you. American Financial Solutions offers financial education and credit counseling services for consumers in need of assistance. Learn how a properly structured debt management plan could be your way out of debt.

Key Takeaways:

  • A debt management plan turns multiple balances into a single, monthly payment.
  • The consumer, credit counseling agency, and creditor each play a vital role in a debt management plan.
  • Credit counseling services empower customers through financial education & actionable plans.

What Is a Debt Management Plan?

Debt management plans are tools that help those struggling with credit cards, medical bills, and other balances. This custom-tailored plan provides a clear pathway toward debt freedom. It may also include other financial strategies to help set you up for future success.

American Financial Solutions proudly offers debt management plans that consolidate loans and credit cards. Under a debt management plan, we will:

  • Consolidate your bills into one monthly payment.
  • Request that creditors lower your overall interest rates and payments.
  • Work to bring your accounts current.

It all begins with a phone call to our non-profit credit counseling agency. During this confidential conversation, a credit counselor will gain a full understanding of your financial situation. Then, we'll consolidate your bills into an affordable payment. You pay us, we pay your creditors, and you get closer to becoming debt free. A typical plan lasts three to five years.

Debt Management Plans vs. Debt Consolidation Companies

American Financial Solutions is not a debt consolidation company. We will never ask you to take out a new loan to consolidate your debt. For some, this can lead to a difficult financial situation if they can’t make the higher payments required for the new loan.

Instead, we educate and advise our clients to help them make financial choices that lead to long-term, positive results. Learn more about us and how we can help.

Is a Debt Management Plan Right for Me?

A seasoned professional can help you determine if a debt management plan is the right choice. If not, they can recommend other methods that may work better. Some people don't need to enroll in a debt management plan – they simply follow an action plan outlined by their counselor.

The credit counselors at American Financial Solutions are well-versed in debt repayment. Our recommendations are backed by years of experience helping thousands of people get back on track.

Benefits of a Debt Management Plan

A debt management plan does more than help you reach your goals. It's also a powerful tool that helps set you up for better decision-making and future success. Some of the benefits of having a carefully designed debt management plan include:

  • Simplified payments: With only one payment and due date per month, becoming debt free is much easier. It also helps you reestablish a consistent payment history.
  • Credit score impact: Setting up a debt management plan may be easier on your credit than bankruptcy, debt settlement, and even some DIY debt consolidation options.
  •  Greater financial security: With a sound plan in place, you're well on your way to reaching your long-term financial goals.
  • Reduced interest rates and fees: Part of our service involves asking creditors to lower interest rates and stop late fees. This helps reduce your overall repayment sum.
  •  No collection calls: Your plan ensures all your creditors get paid. If debt collectors continue calling, you can direct them to your credit counseling agency.
  • Financial education: Credit counseling and financial education go hand in hand. Along with crafting a debt management plan, you'll have access to free classes, newsletters, articles, calculators, and expert financial tips via our blog.

Many people find that developing a straightforward, fixed plan to tackle their debt takes some of the burden off their shoulders. They can feel more confident in their future and significantly reduce the anxiety associated with unmanageable debt.

An American Financial Solutions credit counselor is also an invaluable resource you can turn to for questions and guidance along the way. Knowing that someone is by your side and can listen with a compassionate ear makes all the difference.

Things to Consider About Debt Management Plans

Weighing the pros and cons of any debt relief option is part of the process. In doing so, you can arrive at a solution that works best for your situation. Some things to consider about debt management plans include:

  • Not all creditors agree to participate in these plans.
  • Secured debt is typically ineligible.
  • Credit card access may be lost or limited to emergencies only.
  • You may not be able to take out new lines of credit while enrolled.

A Step-by-Step Process for Debt Management

In a few simple steps, you can enroll in a debt management plan that supports your financial needs. American Financial Solutions is committed to your success and guiding you at every turn of this process.

The Enrollment Process with American Financial Solutions

Enroll in a debt management program with our credit counseling agency by following these steps:

Step 1: Talk with a Certified Credit Counselor

Debt and credit counseling services are available from our certified credit counselors. We'll review your financial situation and help you prepare a detailed budget that includes all your income, expenses, and debt.

Step 2: Review Your Action Plan

Once your credit counselor has gathered as much information as possible about your current situation, we'll develop an action plan to help you reach your financial goals. This may encompass several available solutions, such as:

  • Referrals from our resources center.
  • Spending strategies.
  • Debt management plan.

If a debt management plan is part of your newfound approach, we'll ensure it works within your budget. Best of all, we'll consolidate all your debt into just one manageable monthly payment that's due on the day of your choice.

Step 3: Receive Ongoing Customer Support

We pride ourselves on our excellent customer service and the relationships our credit counselors develop with their clients. Our credit counseling services are available at your convenience. You may also access your account online 24/7 via our website and secure client login.

Considering a Debt Management Plan

Creating a debt management plan is a positive step forward. The critical thing to find out is whether this is the right option for you. Work with a compassionate, knowledgeable credit counseling agency to learn more about debt management services and other solutions.

Get Out of Debt with American Financial Solutions

Your debt management plan could be the first step toward financial freedom. American Financial Solutions also provides educational tools to help you plan and prevent credit problems in the future.

American Financial Solutions is a registered, 501(c) 3 non-profit agency part of the North Seattle Community College Foundation. We're a proud member in good standing with Better Business Bureau (BBB).  Our organization is accredited by Council on Accreditation and National Foundation for Credit Counseling (NFCC).

Don't wait – contact us to review your debt with a certified credit counselor. You can also complete our online application to get started today.