Indebted Arizona consumers who want to avoid bankruptcy might benefit from a debt management program. This is a form of debt consolidation that relies on assistance from a non-profit credit counselor. Unfortunately, like all possible debt solutions, debt management programs are not for everyone. Like with any option, such as bankruptcy, there are pros and cons. So, ideally, Arizona residents looking for a way out of debt should carefully consider their situation before deciding on a plan. Ultimately, they should choose best solution for their types of debts, income, and credit score.
The Perks of Choosing a Debt Management Program in Arizona
When looking for a debt management program in Arizona, the most important thing to remember is that not every program advertised is legitimate. Sadly, scammers prey on indebted Arizonians, so thoroughly research any program you come across. Also, make sure that your debt management program is administered through a non-profit credit counselor.
Obviously, the biggest benefit of a debt management program is that it allows Arizona consumers to consolidate their qualifying debts. First, the credit counselor negotiates with lenders and creditors, and, if possible, gets debts reduced. Next, the counselor rolls these reduced balances into one (hopefully, low) monthly payment.
Often, lenders and creditors willingly reduce debts incurred by Arizona consumers because they don’t want these consumers to file for bankruptcy. Typically, Arizonians who enter debt management programs also pay much less in interest. Altogether, those who can realistically pursue this option end up with more breathing room in their budgets.
Finally, a major perk of debt management programs is that they are available to indebted Arizonians with bad credit. Regular debt consolidation plans, on the other hand, are usually not good options for consumers with low credit scores. This is because standard debt consolidation involves taking out a loan to pay off balances. And Arizona consumers with bad credit either don’t qualify for such a loan or end up with such a high interest rate on the loan that end up paying more money instead of less.
The Drawbacks of Choosing a Debt Management Program in Arizona
Speaking of credit scores, entering a debt management program can cause your credit score to drop by a few points. However, compared to the credit score damage caused by bankruptcy, the point loss is very minor.
Also, all credit card accounts consolidated by debt management are automatically frozen until program completion. This means that you cannot use these credit cards until you pay everything off. Arizona consumers are also not permitted to open new credit card accounts while participating in debt management programs.
The biggest drawback of debt management programs is the fact that now every type of debt qualifies for consolidation. For example, student loans and accounts already in debt collections are excluded from programs. Therefore, Arizona consumers who already have debt collectors blowing up their phones should look for alternate options – possible bankruptcy. With a bankruptcy filing, an automatic stay goes into effect that prohibits debt collectors and creditors from calling.
How Arizona Consumers Can Rebuild their Credit Scores After Completing a Debt Management Program or Bankruptcy
After getting out of debt, Arizona consumers should focus on rebuilding their credit scores. Of course, full credit recovery won’t happen overnight. However, time and effort will yield positive results. Remember that good credit repair involves making all payments on time, responsible credit card spending, and regularly checking your credit reports.
Keeping tabs on your credit reports throughout the credit repair process is important because they are often subject to inaccuracies. Unfortunately, creditors and the credit bureaus frequently mishandle consumer information, and their mistakes show up as credit report errors that bring down credit scores.
In order to make sure that you have the credit score you deserve with all of your hard work, review your credit reports at least once every twelve months. Arizona consumers can do this easily by visiting www.annualcreditreport.com and requesting copies of their credit reports from TransUnion, Experian, and Equifax.
If, while going through your credit reports, you spot credit score damaging errors, contact Credit Repair Lawyers of America in Arizona. When you call our firm, or fill out the contact form on our website, an experienced credit attorney will fix your credit issues and get you clean credit reports – for free.
How Arizonians can Get a Free Credit Repair Lawyer
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (480) 771-6001 or contact us on our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/arizona/credit-repair/.