“The commercial world is very frequently put into confusion by the bankruptcy of merchants, that assume the splendor of wealth only to obtain the privilege of trading with the stock of other men and of contracting debt which nothing but lucky casu – Samuel Johnson”.
Bankruptcy or Insolvency is a term commonly used to describe a state in which an entity can no longer discharge its financial obligations to their creditors. Filing for bankruptcy is what everyone with some level of dignity detest like leprosy vehemently, however it is almost impracticable to stay out of debt completely especially here in the United State of America and in some other countries as well. In fact, our financial system encourages taking some forms of debt or the other and even offers us incentives to take on this loans in form of credit rating. This article presents a way out of bankruptcy using the debt management strategy.
What Is Debt Management?
Debt Management is a strategic management tool developed by financial experts/gurus and organization to help debtors better manage their debt obligations. This strategic debt management tool is implemented by companies and organizations with requisite knowledge, skills and capabilities in order to save debtors from bankruptcy and insolvency.
HOW IT WORKS?
Having received a financial advice from a financial counselor and consequent upon your decision to choose the debt management option. The following procedures are typically followed in debt management service:
? Your preferred debt management consultant/counselor will notify your creditors of its debt management plan and make himself or the organizations he represent the payer of your debt.
? Your financial counselor now proceeds to renegotiate all your debts with individual creditors, with the aim of lowering the debt. Having consolidated all your debt, the financial counselor now start paying your creditors and you are constantly updated with a progress report every month.
? You are now only obligated to the debt management company and you are required to distance yourself from taking up other debt, in fact your credit report is delivered to your creditors on a regular basis.
? Your debt management advisor except you to consistently meet your obligations to the organization in order to maintain the debt management plan. Any slip on your duty may attract cancellation of the plan or other sanctions.
Debt management services enables organizations offering the service the opportunity to assist debtors refinance their debt while still in business. The alternative is to file for bankruptcy which to many is not palatable at all. It is therefore important for individuals and organizations to avail themselves this wonderful opportunity and stick with the outlined conditions agreed in the plan. A financial planning counselor or advisor will further assist to demystify the gray areas.
If you are considering options available to you in order to distance yourself from bankruptcy or insolvency using debt management plan, do not hesitate to use a financial planning consultant who will avail you of his professional advice.