Debt-Management Programs – Paying Off Your Credit Card Debt

A good portion of Arizona residents have at least one credit card. Using a "charge now, pay later" system has become a way of life for many people. Credit cards can be life savers in some circumstances, but can also be to our detriment in other situations. Having a credit card or two on hand to pay for emergency or unexpected expenses is not a bad idea, but if they are not used responsibility, credit cards may haunt you for years to come.

If you have a mountain of credit card debt, you are not alone. You may feel like you are stuck in a vicious cycle, making your monthly minimum payments on time, but barely paying off your total balance. You are using your hard-earned money to pay an enormous amount in interest rates. So, what options do you have other than to file for bankruptcy? Contact the bankruptcy and debt settlement attorneys at Ariano & Reppucci to find out more.

As a consumer, you have options that you may not be aware of. In addition to filing for bankruptcy and negotiating with your creditors to settle your debt, you have the option of enrolling in a Debt-Management Program (DMP). These programs allow you to consolidate all of your credit card or "unsecured" debt into one monthly payment. In doing so, you will be working with a debt-management agency that will negotiate with your creditors on your behalf, to agree upon a lower monthly payment at a lower interest rate. Some creditors will not agree to participate in debt-management programs, but many will.

After negotiating with your creditors, a reasonable debt-management agency may charge you a low monthly fee for using their services, and this may be worth it if the program will enable you to eliminate your debt in the most efficient way possible. In order to complete the program, you will be paying one monthly payment to the debt-management agency, and the agency will then distribute your payment amongst your creditors. Many individuals are able to pay off thousands of dollars of credit card debt in as little as three or four years. A condition of enrolling in a debt-management program is that your credit card accounts will be closed. Some creditors may allow you to reopen your accounts after you have paid the entire balance, but some may not.

Are Debt-Management Programs Legitimate?

There are always agencies and companies that are dishonest and want nothing more than to take advantage of you. There certainly are debt-management agencies out there that will charge you hefty fees for using their services and you could end up paying more overall in the long run. A key factor to look for in determining whether or not a particular debt-management agency is legitimate is whether or not the agency is a not-for-profit company as opposed to a for-profit company. The not-for-profit agencies are more likely to be legitimate, but you should always do additional research. Before making a choice about debt settlement or bankruptcy you should consult an experienced bankruptcy attorney in Scottsdale.