What is a Debt Management Plan?

At Superior Debt Relief, it’s our goal to help our clients manage their debts and stabilize their financial foundations. One of the tools we use to accomplish this is a Debt Management Plan, or DMP. To that end, our debt counseling services and our agents work with our clients to help them design a DMP that is tailored to meet their specific needs, helping to balance their debt payments within their existing budget.

Various debt relief companies offer flashy means of getting out of debt and meeting those lofty obligations. But with a DMP, Superior Debt demonstrates how crafting a viable plan can work for you and your circumstance. If you still have questions, here are the key components of a DMP:

Repayment Duration

Most DMP’s will be set up to cover a term of between 36-60 months. The greater the debt a client carries, the longer the duration a DMP will be set up for in order to keep the monthly payments manageable.



Many creditors charge exorbitant fees for late payments. These add up and add to the principal an individual owes to their creditor. Often, these fees negate any payments that are made. A DMP can help reduce, and in many cases, eliminate these fees.

Interest Rates

One of the leading causes of spiraling debt loads are the interest rates that credit cards, hospitals, and other creditors charge customers who are late on their bills. It is not uncommon for these interest rates to exceed 20%. Thus, one of the primary goals of a DMP is to negotiate a lower interest rate with the creditor so that more of your payment is being applied to principal each and every month.




Consolidation

A DMP will combine all of your debts into one payment each month. This makes it easier to make the payments and stay on schedule. This goes a long way towards reducing stress, and it’s an effective way to mitigate the costs and fees incurred by missed payments to individual creditors.

Education & Counseling

Understanding your debt and obligations is crucial to keeping debt under control now and in the future. To that end, one component of a DMP is educating clients on everything from finance terms to ways to develop a household budget. Taken together, the educational component of debt counseling and a DMP is essential to avoiding a repeat of financial difficulties in the future.

The debt counseling services we offer at Superior Debt Relief can help you reign in your debt loads and get your financial future back on track. To learn more,

Debt Relief Solutions That Could Work for You

It is easy to turn a blind eye and ignore debts as they mount and pile up. It’s a common occurrence, and while it is easy to ignore those debts for a while, eventually they will need to be resolved. Here are four debt relief solutions that can help you put your debt unrest to ease once and for all.

Debt Settlement -  This is an ideal solution for unsecured debts such as credit cards and medical bills. Via this approach, a debt arbitrator will negotiate with your creditors to reduce the total amount of money that you owe. This has the advantage of not only lowering your payments, but it can also shorten the duration of your payment term to between 12 and 36 months.

Debt Consolidation - Making multiple payments each month is full of pitfalls. For one, your interest rates and payment dates can vary widely; this can lead to missed payments and fee accumulation. Debt consolidation takes all of your debts and combines them together at a lower, fixed rate that won’t change. Further, since your debts are combined, you only need to make one payment each month.



Credit Counseling - Interest rates can eat up a significant portion of your monthly payments. Credit counseling can lower your interest rates, but it won’t reduce the total amount of money you owe. One drawback of selecting credit counseling is that any assistance you receive from a credit counseling company will show up on your credit report and lower your credit score. Thus, it is an option that you should weigh very carefully before deciding upon.

Chapter 7 Bankruptcy – This is a last resort option that we strongly caution our clients against. It has significant credit consequences and should only be chosen when the sum of money owed on credit cards and other unsecured debts is simply too much to ever be paid back. Declaring Chapter 7 Bankruptcy is a choice that should only be exercised when all other options and solutions have been thoroughly explored and exhausted.

There are a number of debt relief solutions that Superior Debt Relief can assist you with. We invite you to contact us by calling 866-896-7616. Our IAPDA certified arbitrators will be happy to help you navigate the solutions that can help you find proper financial footing.

Four Reasons to Avoid Debt Settlement Companies

Not all debt settlement companies are created equal. Because of unscrupulous business practices of some companies within our industry, we strongly recommend our clients do their homework carefully before signing up for any debt settlement plan. After all, your finances are on the line, and you need to be confident that your money isn’t going to be taken for a ride as you travel down the road towards financial stability. The following are four red flags we consider deal breakers when assessing a debt settlement company.

The Company is Not Professionally Accredited. Any company can register with the BBB, but not every company can register with the BSI Group, the United States Organization for Bankruptcy Alternatives, and the IAPDA. These organizations set rigorous standards for our industry that members must adhere to. These standards not only ensure high quality service, they also guarantee that the highest level of integrity and ethics will be delivered.

 

There are Risks Involved. Many debt settlement companies require participants to deposit money into a special savings account every month. At the end of the specified term, these funds are turned over to the creditor and the debt is officially settled. Many times, people drop out of these programs, and in the process, they lose the money they’ve deposited. Additionally, some debt settlement companies will actually encourage debtors to stop sending payments to the creditor altogether. This can cause late fees, penalties and nasty dings on credit reports.

Scams are Plentiful. If it sounds too good to be true, it is. Any company that says they have a “new” program, will settle for pennies on the dollar, or can make your debts simply vanish, is full of hogwash. These are red flags that should make you get up and walk away from the table.

There are Costs. Debt settlement is a business, not a charity. The company gets paid with fees earned from helping you manage your debts. These fees can add up, and you’ll want to make sure you understand them so there won’t be any hidden surprises.

Debt settlement is something that doesn’t happen overnight. However, the IAPDA certified team at Superior Debt Relief Services is ready to help you with proper debt management. We invite you to contact us by calling 866-896-7616 to learn more about the counseling services we have available.

Save Yourself by Avoiding These Bad Credit Loans

bad credit, to purchase something or draw more credit, it’s wise to be hesitant of that lender. These companies are often searching for people who are in financial trouble because they perceive them to be easy and vulnerable targets.

Credit loans can be tempting for consumers seeking debt assistance, but there are five types of credit loans that are best avoided because of their reputation for exploiting debt issues rather than improving them.

Payday Loans – With proof of income, this type of loan is designed to be repaid upon the arrival of the borrower’s next paycheck. Unfortunately, the cost of repaying the loan does not leave enough income for the borrower to also pay bills, meaning they’ll need more payday loans to make it to their subsequent checks.

Auto Loans for Bad Credit – Vehicle salesmen work on commission, so some of them will push inadvisable loans if it means they can make a sale. Steer clear of any auto loan that’s set at 10% interest or higher or requires more than five years to pay off. The vehicle’s depreciation and bleak refinancing options mean it may become worth less than the amount owed.

Auto Title Loans – Consumers borrow these loans when they’re looking to make quick cash by leveraging their vehicle as collateral. Basically, they will lose their car if they can’t pay back the loan. Not only is this a risky prospect, but the sky-high interest rates are nothing short of a scam.

 

Mobile Home Loans – These loans are designed to prey on low-income borrowers who feel they can’t afford a house but who desire more privacy and ownership than apartment living. Ironically, after considering the fast depreciation of mobile homes and the ridiculous interest rates, consumers may actually fare better paying a mortgage.

Personal Loans for Bad Credit – The business plan for selling personal loans to those with bad credit is simply to charge more interest than the amount originally borrowed in order to turn a profit. Some of these companies even sell life insurance to guarantee you can pay your debt posthumously should anything happen to you!  CreditCards.com

The Benefits of Consumer Credit Counseling

Life is an unpredictable journey. It is often full of twists and turns that can rock your financial foundations and leave you with debts that are difficult to pay. As these accumulate and grow, it can be difficult to find solutions to your mounting debt. When that happens, consulting professional debt counseling services is the best option towards reducing your debt and regaining your financial independence.

Seek an accredited credit counselor to find your way out of debt.

The first step in the right financial direction occurs when you work with a credit counselor who will advise your debt management plan. Often, this is referred to as simply a DMP. This is one of the first steps you will have to take when working with debt counseling services, which is why it’s imperative to form a DMP before meeting them. That is because a DMP is an efficient way to lower your interest rates and get all your bills consolidated into one monthly payment.



Managing a DMP with the assistance of debt counseling services accomplishes several goals. Most importantly, it is often possible to lower your interest rates so that you are paying more towards the debt principal each month. This means you’ll pay off your debts faster and won’t be wasting money on out of control interest charges.

It also makes it easier to avoid late fees, helps you rebuild your credit profile, and it ends those frustrating phone calls from creditors each month. Effectively, it assists in putting you back in control of your finances, and makes it possible for you to focus on your financial future.

Without question, the greatest benefit certified debt counselors have to offer you come from sharing their expertise to help you strategize for your financial future. From start to finish, a debt counselor can help you devise a budget and develop healthy financial habits that will allow you to save money and avoid potential problems down the road. After all, life is a long journey and the sooner you take control of your money and your expenses, the smoother the road ahead will be.

Since 1998, Superior Debt Services has been helping people take control of their debt. Our certified consultants are experts in debt negotiation and would be happy to help you regain your financial freedom. To learn more about our debt counseling services and the many ways we can assist you, contact us by calling

The Fed is Letting Off the Brakes of Quantitative Easing

The economy is starting to pick back up again and is causing the Federal Reserve to scale back their policy of quantitative easing. This was one of many strategies they employed in order to help mitigate the damage from the recession that began in 2007 and continued through 2009.

Be sure to keep an eye on your debts and obligations as the 

Fed begins quantitative easing.

Under this program, the Fed purchased government bonds each month that totaled billions of dollars. This brought liquidity to the economy and kept interest rates low, while encouraging investments from both consumers and businesses. The strategy was effective, but it wasn’t a long-term solution. Instead, it raised the national debt.

To remedy this effect, the Fed is considering a gradual tapering of their quantitative easing program. As their confidence in the economy grows, the government can begin selling these bonds on the open market without triggering inflation or causing the economy to stagnate.

However, there is a risk that potential home buyers should be aware of. As the Fed begins selling these bonds to private investors, it’s possible that it could trigger interest rate increases. For now, the government is holding onto these bonds, but they’re keeping their options open and may begin selling them as early as the second quarter of 2015.

If and when the Fed makes these bonds available on the open market, it will impact personal finance rates on everything from car loans to mortgages. Right now, with over $4 trillion in credit, you can bet that selling these bonds will involve a delicate balancing act between generating profits, freeing up capital and keeping interest rates from ballooning and triggering another recession.

For these reasons, we strongly suggest you get your finances in order as soon as possible. Doing so now can help you secure the best interest rates on your loans and help mitigate any potential rate increases that would impact your personal finance goals. Whether you have a mortgage, an auto loan, student loans, or a stack of medical bills, rate increases could occur across the board.

As always, Superior Debt Relief Services is happy to answer your questions regarding quantitative easing and the ways we can help you get your finances back on a solid footing.

Do Debt Consolidation and Settlement Programs Work?

Obviously, there are options for debt relief besides the drastic action of filing bankruptcy. Settlement is one of the most practical debt relief methods available. When done correctly, a settlement program can reduce your unsecured debt by 50% or more. While it is possible to pursue negotiations yourself, the process usually begins with enrollment in a debt settlement company.

Upon enrollment in a consolidation program, you will save up your disposable income in a savings or “special purpose account”. As the money in your account begins to accumulate, the company you enrolled with will negotiate with one of your creditors at a time to agree to pay off amount that is less than that of your original debt. Once your account has grown to the agreed upon amount, they are paid and your account is considered closed and no further payments will be due.

The process then repeats with each of your other creditors until all have been paid. It may seem against intuition that creditors would accept payment that is less than the full amount they are owed, but in reality it makes a great deal of sense. After all, if a creditor turns down a proposed settlement, and the borrower files bankruptcy, his or her creditors often receive none of the money they had been owed. Obviously, it is in a creditor’s best interest to receive a partial payment rather than nothing at all.

A word of caution here: trying to settle debts yourself can be very difficult. Credit card companies are often reluctant to negotiate directly with the debtor and they may even tell you that they don't do settlements under any circumstances. This is generally a boldface lie, but they would rather continue to try to intimidate you as long as they are dealing with only you. When your account goes to a settlement company, they realize that you have someone on your side and they will no longer be able to intimidate you with threats.

Get Out Of The Red And Live Financially Free With Our Services

Furthermore, if you opt for a settlement program, they will now accept the seriousness of your financial situation and recognize that collecting nothing on the debts you owe is a genuine risk. But one of the greatest incentives for them to settle - at years end, they can write off the amount not collected on your accounts towards their taxes. It's a game where they cannot truly lose money... the worst they can ever do is break even.

Superior Debt Relief is a Debt Relief agency. Our Debt Settlement Company works on your behalf to secure debt-free living with a number of services, including: Credit Card Debt Relief, Debt Consolidation Program, Debt Negotiation, Debt Management Benefits and Consumer Credit Counseling Service.