Debt Management
By: Leroy A. Binns Ph.D.
Debt management is a widely adopted practice utilized to
assist debtors who are incapable of addressing their finances. This strategy is
most often developed and implemented by an independent organization working on
behalf of clients who are insolvent and lack the knowledge and/or will to
correct an overwhelming amount of debt.
The impact of inflation coupled with loss of employment,
investments and medical and/or educational expenses are common contributors to
such fiscal dilemma. However corrective measures can reverse this tide of
despair. For some bankruptcy allows an opportunity to forgo liability and
regain a semblance of stability in the years ahead while others select the path
of fiscal reconstruction with the intent of repaying arrears over a prescribed
duration of time.
While bankruptcy rids parties of monetary obligations it
taints credit records for prolonged periods thus restricting lending
privileges. In contrast modification defined by frugal means and disciplined
attention to a repayment formula could yield the following benefits: lower secure
debt payments, reduction of the elimination of interest rates and penalties,
improved credit record and scores and a possibility of expunging the economic
burden in many instances within 36 to 60 months.
An illustration of exemplary debt management accents the
Hildebrandt family of New Richmond, WI who are the proud recipients of the 2009
Professional Achievement and Counseling Excellence Client of the Year Award. The
Hildebrandts a family of five gained coveted attention via The National
Foundation for Credit Counseling for eliminating a debt of $106,000 owed to 11
credit card companies, other creditors and family members in 4 years and 4
months – 8 months ahead of schedule.
With the assistance of Consumer Credit Counseling Service in
Stillwater , MN that negotiated a favorable interest rates
and reduced payments plus steadfast deployment of domestic adjustments Russell
and Kandy Hildebrandt endorsed a rigid agenda that entailed a monthly payment
of $2,000 to CCCS for coverage of all obligations to the creditors. Russell, a
chemist at an environmental lab in Blaine, WI acquired a second job as a
janitor in a grocery store at a wage of $10 per hour – a feat that sometimes
constrained him to seek refuge in his car at nights for lack of funds to drive
home and increased his weekly work hours to 100 for at least 4 years. Meantime Kandy , a housewife balanced
the budget by purchasing generic foods, clothing and additional items at thrift
stores, online and at yard sales for the household which included teen aged
twin daughters Holly and Heidi and 3 year old son Joey. The family even avoided
the temptation of sharing gifts at Christmas and more importantly buying a
second vehicle.
The success story aforementioned is attainable by others
providing sacrificial deportment is a prime ingredient towards the solution.
Whereas the likes of CCCS and AmeriDebt provide expertise at a cost, the
client/s must exercise determination and to a lesser extent adroitness. In
essence as appropriately confirmed by the article entitled, “The Truth about
Debt Management” debt management is 80% behavior and 20% head knowledge.
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