Between student loan payments resuming and price increases on essentials, American households are racking up more debt than MC Hammer in the 90s. 🤪 Unfortunately, the repo man won’t listen when you say “can’t touch this.” 😕
When debt gets to be too much to bear, there’s still hope. A debt management program could be your ticket out. 🎟️
Here’s Five Fast Facts on debt management programs:
- 🔥 Dumpster Fire - Carrying high credit card balances can feel like throwing gasoline on a fire. Making minimum payments keeps the creditors from calling, but that interest adds up quickly. The average credit card interest rate is 22% and in some cases it’s even higher.
- 📈 Can You Dig It? - To dig out of the debt hole, a debt management program consolidates all of your debts into one monthly payment. Depending on the program you enroll in, it may also lower your interest rates, waive fees, and create a repayment schedule that lines up with your budget.
- 🐨 I’m Koala-fied - If you want in on a debt management program, you’ll go through a qualification process. They’ll look at all of your eligible debt, like credit cards, personal loans, and medical bills. Fun fact: mortgages, car loans, and federal student debt probably won’t count. They’ll also review your income and make sure you earn enough to cover the monthly payment.
- 💰 Big Ticket - Debt management companies won’t take on people with small amounts of debt. They typically work with people with several thousand dollars in debt that’s overwhelming for their personal financial situation. Many programs also make you close your existing credit cards, so be ready for that.
- 💸 Settle Down - If you don’t qualify for a debt management program, try your luck in a debt settlement program. Those companies work with creditors to reduce the amount you owe in exchange for a lump sum payment. Then, you pay off the remainder. Note: this really whacks your credit score, but you can build it back up over time with healthy financial habits.
🔥Bottom line: More Americans than ever are in over their heads with personal debt. The good news is that there are ways out. A debt management program isn’t for everyone, but if it is, it could give you a fresh start. Looking for a side hustle but hate the thought of sales? Check out this list of ideas that don’t involve hitting up old friends from high school on Facebook.
Are you currently enrolled in a debt management program?
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