Bottom line! If you still have financial debts obligations after paying your main debts and expenses, you should think about creating a debt management plan right away.
A debt management plan is actually a monetary arrangement made with your creditors for paying loans at regular intervals or installments. You can even hire a debt management company to do negotiations on your behalf with your lenders. The management companies take a nominal fee or sometimes work without charges, but they will work completely for you. You just have to give them all the necessary information, and they can work your into a affordable debt management plan.
There are so many valid reasons for hiring a debt management service. For instance, you have to pay a single lump sum to your management company then they will send your payments to your lenders accordingly. You can do this until you are through with your payments. These reasons may sound very convenient but they certainly have a negative aspect. Many debt management companies take a heavy upfront fee from the clients which make the client almost empty pocket. They upfront fee is actually an administrative charges which companies take from customers.
Some companies charge a fee as much as your total one month payment of debt. So these extra fees are an extra expense on your bank account.
The actual work of debt management companies is to create and provide a payment schedule proposal to your creditors. This basically means that the payment installments are decidedly made by the lenders. Usually a good management company may ask you to pay to your creditors the amount which you can afford after your priority loans are paid. Ideally, this is good for both the lenders and creditors.
One thing you must also know is that debt management companies only provide assistance for non-priority debts. Mortgage, student, IRS loans are usually not handled by these companies. So you have to deal with other lenders by your own. As the debt management companies work on your non-priority loans, ask them before hand which type of loans are included in their proposal.
Normally the clients have a right to revoke the agreement whenever they feel uncomfortable. On revocation you might get your upfront fee refunded (terms and conditions are stated in the agreement). The most essential thing for a customer is to have complete communication and knowledge about the payment of their debts with the debt management company.