Risks Of Having A Debt Management Plan

By Author: J.J. Yong
Total Articles: 963
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Debt management plans are currently considered as "hot cakes" in the market because there are more and more people looking for these plans to solve their financial issues. However, before you make your final decision to sign up for one of these plans, you need to know some of the "risks" you may face. Here are some facts you need to consider carefully:

· If currently you are having multiple unsecured debts, you are reminded that not all your creditors are willing to participate in the debt management plan. Even after negotiation, they still don't agree to accept.

· If you are currently jobless or your income is unstable, you may not be able to keep up with your monthly payment as scheduled in your plan. It is no point for you to sign up for this plan because it will make your credit rating worse.

· Statistics show that most of the debt management plans take about 5 years to complete. However, the duration is too long. You should get rid of your debt as fast as possible especially in today's economy with a shrinking job market. If you fail to do that, your ability to pay back the debt will be affected ...
... by the recession.

· Many people think that by having a debt management plan, their credit report will not be affected. Yet, this is wrong. Participating in this plan will not affect your FICO scores but it harms your credit histories. Your credit report will show that you are paying on your debt management plan. It will make you more difficult to apply for new credit or new loan because the lenders have no confidence on you after viewing your credit report. Furthermore, it takes 7 years for the information to be removed from the report.

As a conclusion, if you think that all the points stated above are not limitations for you, you are still encouraged to join the debt management plan.
For more information about best debt management companies and debt management plan, visit DebtManagementEssentials.com.