Suggest Debt management plan..?

[solomon]

Hi Everyone,
Which debt management program do you suggest?Any one suggest some good debt management plans..?

[disneysteve]

I think the best plan is to sit down (with your spouse if married) and come up with a written budget. Prioritize all of your spending from most important (things like food, housing, utilities, gas) to least important (things like dining out, cable tv, travel). Each month, make sure the necessities are covered first and that some money is going to savings to build an emergency fund. We often recommend a $1,000 starter emergency fund.

Once that is in place, start attacking the debts. Pay the minimum on each one except the one with the highest interest rate (others will recommend starting with the lowest balance - ultimately either way works). So pay the minimum on all but one and put all extra money onto that highest rate debt. Once that is gone, move on to the next highest rate (or the next smallest balance if you go the other route).

The key is to stick to the budget and cut out as much unnecessary spending as possible. Cancel cable TV, stop eating out, don't buy clothes, no vacations, etc. until the debt is taken care of.

[Homebody]

I agree with Steve, no magic, just do it.

You might want to try the cash jars a la Till Debt Do Us Part or the envelopes a la Dave Ramsey (and others) to help encourage you to stick to your budget.

As Steve said, sit down with your partner/spouse. Two make more progress than one fighting the other.....I know of what I speak!

[cjscully]

It may occur that due to loss of income you still can't afford even the minimum monthly payments on your debts even after cutting out all unnecessary expenses. If that's the case you should consider credit counseling or debt settlement (which is something you can do yourself).

[jpg7n16]

The best plan is anything like above: cut expenses to less than income, pay the surplus down on debt.

If you're looking for books, I'd recommend checking these out from your local library (it's free):

Amazon.com: The Total Money Makeover: A Proven Plan for Financial Fitness (9781595550781): Dave Ramsey: Books

Amazon.com: How to Get Out of Debt, Stay Out of Debt, and Live Prosperously: *(Based on the Proven Principles and Techniques of Debtors Anonymous) (9780553382020): Jerrold Mundis: Books

And if you're really struggling with debt, go to your church and ask if they have any assistance for either a Crown Financial or Financial Peace class. Some churches help people who can't afford the course by paying their way. Or even a money management ministry to have someone help coach you through your situation.



But all the books and courses will teach are ways to help yourself to spend less than you make, and pay down debt.

[disneysteve]

Originally Posted by jpg7n16

If you're looking for books, I'd recommend checking these out from your local library (it's free):

Amazon.com: The Total Money Makeover: A Proven Plan for Financial Fitness (9781595550781): Dave Ramsey: Books

FYI - Dave Ramsey is having a sale at his website, daveramsey.com, and all of his books, dvds and such are $10 each.

[Hunters]

I agree that participating in a debt management plan through a credit counseling agency will hurt your credit, though likely not as much as some other alternatives. However, a debt management plan will take longer, cost you much more money, and may not significantly reduce your monthly payments or balances (but interest rates will probably be reduced). Generally, you'll end up repaying 100% of what you owe, plus interest, but at a lower rate.

[maat55]

Try listing your income, debts(with interest rates and minimums) and living expenses. You do not need a management or settlement company.

We can tell you what we would do in your shoes once we know what your shoes look like.

[Bastille]

You should always go for a debt management program that can meet your specific needs. For example, if you are in need of advice to manage debts such that you can pay them off quickly, then you need a program that can help you achieve this.

[Radiance]

This is what I always say, because it worked for me:
I did consulted with a debt management plan for a free consultation. by law they have to help you for free.
Then I cordially decline their services but used all the information and advice they gave me, plus the help on this site, to dig myself out of debt.

I even called them 2-3 times after to ask more questions, and they have to help you.
Use one local to you, nothing like sitting down with papers at hand and a person at the other side of the desk.

All the best!

[Eric80]

Debt consolidation or an IVA are both really good - an IVA will allow you to organise a repayment plan that suits you and your creditors whereas consolidation does exactly what it says on the tin - both are really good and I definitely think you should look into these.