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Can You Have 2 Debt Management Plans

Many people find it difficult to manage their debt due to one of two things – they do not have enough money to pay off all of their debts, or they have more than one creditor asking for payment.

There is no right way to deal with your credit card debt, but there are ways to tackle different types of creditors. This can be done through personal bankruptcy, paying off the entire balance in full, negotiating lower interest rates, filing late payments under federal bankruptcy laws, using credit cards that have reward programs, or transferring the debt to another lender.

Personal financial advisors say that having several plans to repay your debt makes sense because you will feel motivated to keep up monthly payments even if you are unable to at times. It also helps ensure that your credit rating is not affected by falling behind on your obligations.

Having too many loans can make it hard to know who to trust with your finances. An individual or group of individuals can offer you various strategies to help you get out of debt. Choosing which ones work for you depends mostly upon your budget and how willing you are to put in the effort to achieve your goal.

Small business debt management plan

can you have 2 debt management plans

A small business debt management program is also known as credit counseling for businesses. This type of debt solution is designed specifically for your business, so it does not work like individualized debt solutions that help individuals get rid of their personal loans or credit cards.

This kind of debt solution helps you reduce, re-pay or even eliminate your business debts. There are some restrictions to what types of creditors can be contacted during this process, but overall the goal is the same — make paying off your debt easier by restructuring it.

A small business debt management program usually lasts one to two years and there are fees dependent on how much money you have in your business. These costs are all included in the price of the plan though.

There is an initial cost to join the program which covers things such as legal documents, a phone line, and someone who will oversee your case while you are gone. After those first few months, monthly payments are typically around $100 per month.

Combination debt management plans

can you have 2 debt management plans

Recent developments in debt reduction include combination debt repayment strategies, which are quite different from having one clear goal of paying off all your credit cards with VISA.

With these strategies, you keep adding to your debts by spending money that you do not have, but your monthly payments stay the same! It is like keeping your hand in the door so that you cannot close it.

This does not work long term because you will continue to spend more and more money every month to make up for what you did not pay for earlier. Obviously, this can create an even bigger problem down the road.

There may be instances where using a combination plan makes sense, but only if you really understand why such a strategy would not work for you or your situation. Make sure you check out our article about common combo plats so that you know what is allowed.

Debt consolidation

Recent developments in debt management have made it possible to achieve your goal of paying off your credit card debts more quickly with a simple plan: debt consolidation.

Consolidation means bringing all of your credit cards into agreement with one lender, either yours or a third-party’s. This makes it easier to manage your money as you pay down each account separately with your monthly payments.

By taking control of your finances through a clear understanding of how much money you have and how to spend it, this is a helpful way to focus on staying within budget.

Debt consolidation can also help remove confusion about which bills need to be paid when and how. By having just one place for payment information, it becomes simpler to keep track of everything.

In addition to helping you stay out of trouble by keeping up regular payments, there are sometimes special rewards for completing debt counseling. These may include lower interest rates, additional credit lines, or both.

You might even qualify for tax credits or deductions if you successfully work with a professional to reduce your spending and repayments. It depends on what your situation is and what benefits the company can offer you.

There is no right or wrong way to do it, but talking things over with professionals and potential reward programs can make your experience better.

If you feel that you could use some extra help in managing your money, consider looking at debt management services.

Debt settlement

can you have 2 debt management plans

Recent developments in debt management strategies include credit counseling programs that offer to help you negotiate with your creditors on your behalf as well as bankruptcy.

Both of these options can be very expensive, but they are necessary for people who have become overwhelmed by their debts.

Debt settlements occur when all of your unsecure loans are transferred to a third-party collection agency or trustee that is paid a large lump sum of money per loan. This person then goes after individual lenders directly to receive the rest of each loan’s payment.

This process happens several times until every penny owed to the creditors has been received. Because this is done outside of the court system, it is not considered “bankruptcy.”

However, since the payments are still categorized as financial obligations, individuals will need to report them when filing for bankruptcy later. It is up to you whether to do so before or after completing either debt settlement or bankruptcy.

There are some restrictions on how long you can use debt settlement services beyond what time limits are set out by law.

Debt budgeting

can you have 2 debt management plans

There is no one right way to manage your debt. Different people have different strategies that work for them! Because there are so many types of credit cards with different rewards, reward systems, fees, and interest rates, it is very common to find someone who does something new like keeping track of how much money you owe or using a special software program to help you organize and pay off your debts.

In fact, some experts even recommend having several different debt management plans in order to choose from when paying off your loans becomes possible. This can include credit counseling services, debt settlement programs, bankruptcy, and more.

It is totally okay to try out various tools to see which ones work best for you. While some may feel negative about filing for bankruptcy, most professionals will tell you that bankruptcy is the only option if you cannot repay all of your debt under regular circumstances.

Bankruptcy allows you to get rid of most of your unsecured debt (credit card debt, medical bills, etc.) in a fair manner, but it comes with an expensive price tag. It also means that lenders must write off what you owed as lost.

Debt Therapy

can you have 2 debt management plans

There is an increasing trend of individuals trying to manage their debt through various strategies, instead of paying off all of their credit card debts in order to have “bankruptcy”. These strategies are called debt therapy.

Many people feel that they would be better able to deal with their money if they only had access to limited amounts of cash, so they settle for keeping their loans but going into more affordable payment plans or even negotiating lower interest rates.

These strategies seem great at first because you're choosing not to pay back every last penny you owe, which can make you feel happier about yourself, your finances, and your job position.

However, this also gives you and your creditors longer to spend your money before you say "payback!"

In fact, some counselors and experts suggest that staying within your budget is actually a worse choice than bankruptcy. By avoiding bankruptcy, you give yourself and your creditors additional time to continue spending!

It's important to note that most financial advisors discourage using debt-rehabilitation programs as a way to stay out of bankruptcy. This is due to the increased costs of filing for personal bankruptcy.

Instead, they recommend taking steps towards improving your monthly income or reducing your living expenses to free up funds that you could then use to repay your debts.

Financial counseling

can you have 2 debt management plans

For many people, having debt is a struggle. Credit card bills keep piling up with no end in sight!

It’s an uncomfortable feeling to know that you can’t afford to pay all of your debts, but there are ways to get out of credit card debt.

Debt management programs (or DMPS) offer help for individuals who have trouble controlling their money due to balance-shifting debt payment strategies or poor spending habits.

A financial counselor helps you develop budgeting and spending practices that work for you and your lifestyle, while also helping you negotiate with creditors on how much you must repay.

These experts agree to reduce the amount you owe so you can stay within your means. This way, you don’t need to make large payments, which may be difficult if you made large monthly payments before.

Some professionals will even go as low as $50 per month to lower your balances, making it possible to remain financially stable. While they might take longer than buying new clothes, this approach is more effective in the long run.

There is some debate about whether these plans are worth the cost, but most experts agree that they are. A few fees typically add up quickly, however.

Credit counseling

can you have 2 debt management plans

For some people, there is an option beyond just paying off their debt in order to live a happy life. This alternative is called credit counseling.

A credit counseling organization works with you to get your finances back under control, but they do not take away any of your money. They create a budget for you that can include reducing monthly payments, re-establishing payment arrangements, or even creating a new plan when needed.

There are many reputable organizations that offer this service. To see if yours is one of them, check out sites like Gossamer Press’s list of nonprofit credit counselors or NerdWallet’s article about ways to choose a good credit counselor.

Some people call these types of programs bankruptcy alternatives because they eliminate most debts forever, but that isn’t always the case. Some companies may help you keep going after you pay off what you can, however!

This way you don’t have to give up living a comfortable lifestyle because you can’t afford to make large purchases, but you also don’t need to spend lots of money to feel safe.

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