Integrated Family Community Services 3370 South Irving Street, Englewood, CO 80110-1816 Ph: 303-789-0501

Debt Management Techniques- An Overview

Since the recession period, the number of debt management agencies shot up in direct proportion to the rise of number of debt defaults. Oftentimes, the borrowers reach a stage when they become helpless not knowing how to rid themselves of their debt commitments. But being experienced, the agencies adopt all debt management techniques effectively to redeem them.

Getting debt management techniques:

This involves making self-analysis of the loans, paying capacity, and lenders, including getting to know the various calculations for deciding on the correct option by using calculator,and choosing the debt relief agency with good credentials to help and plead for suitable settlements.

These loans fall under different categories such as students’ education loan, personal loans, credit card loans, car and house loans, there is a solution for everything.

Some tips:

Negotiation with lenders, direct personal settlement, avoiding clubbing and  replacing old loans by a single new loan will be of great help.  Avoiding using credit cards and spending only when it is a must are other useful tips to follow.

Student loans:

For students, the government stands by their side offering a flurry of programs to choose from:  Income-based loan repayment program tailored for low salary section with repayment limited to only 10% of the income spread over a span of 25 years; and Federal loan forgiveness option catering to people working in public sectors, corps and health services and the like with waiver partially up to 70% and fully in certain cases, and with government paying interest in some cases.

Other techniques for students include Employee packages with company paying additional monthly amount toward settling loans for the employees;  Pay as you earn program allowing lowest possible monthly instalment owing to individual’s tough times with forgiving provisions and extended periods; and Bankruptcy code for student loans with extremely poverty-stricken students being given forgiveness.

Other loans:

For the general public, sky is the limit for getting loans in terms of amount and the number. So the advice and techniques followed are accordingly different, again all coming with solution. Loan consolidation method is one option suitable for those with multiple loans and who miss out on repayments owing to confusion and insufficient funds. Here, all the loans are merged as one with low interest rate and reduced monthly instalment which makes the repayment process simpler for the borrower.

Adopting Credit counseling technique, which is another option suitable for low amount debtors, makes direct negotiation with lenders pleading for reduction of interest rate and quantum of monthly payment for ease of payment.

Loan settlement method is also a technique which the loan relief companies handle through direct negotiation with creditors and extract 50-70% forgiveness together with easy repayment options; this is resorted to for those who are heading otherwise toward bankruptcy.

Yet another program called Consumer Plan is in place for the benefit of borrowers with non-secured loans arising out of operation of credit cards, similar to bankruptcy cases. Handled by only authorized trustees, maximum concessions- partial loan forgiveness and low interest rate are extracted from the creditors quoting the hapless plight of the borrowers. A knowledge of all these techniques will go a long way in ensuring peace of mind for the debtors.

Paul is an associate at National Debt Relief, a BBB accredited business that has helped thousands of Americans resolve credit card debt problems. Consumers can take advantage of a free debt consolidation session to discover their options for debt relief with no obligation.

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Integrated Family Community Services is a 501(c)(3) non-profit organization.

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IFCS’ Tax ID # 84-0579740