How to Become Debt Free with A Debt Management Plan in Florida

Find a Credit Counseling Agency

Florida law governs the maximum fees and costs that may be charged for debt management services. If you feel you the credit counseling agency you are dealing with is engaging in fraudulent or deceptive practices, you can file a complaint with the Florida Attorney General.

Florida law allows for-profit credit counseling agencies to charge up to $50 for their initial consultation. However, you should never pay this fee. Accredited, non-profit credit counseling agencies do not charge anything for an initial credit counseling session. In addition, non-profit credit counseling agencies focus on your financial education and not just your business. They discuss all forms of debt consolidation or debt relief and not just debt management plans. Finally, most reputable non-profit credit counseling agencies are accredited by the Council On Accreditation (COA). This accreditation ensures that their credit counseling practice conforms to industry standards of transparency, full disclosure, and consumer education 

There are several national, accredited non-profit credit counseling agencies that provide non-profit credit counseling free of charge in Florida such as Money Management International, CESI or GreenPath. To speak with a credit counselor at a non-profit we trust, contact Upsolve.

What to Expect at Credit Counseling

Your initial credit counseling session should serve as an opportunity for you to discuss your current financial situation with a trained, certified credit counselor. At the session, the credit counselor will work with you to assess your personal finances, including your income, expenses, and debts. Establish financial goals for both the short-term and the long-term. Develop an action plan to achieve those goals. Create a realistic and affordable budget and end each session with a debt relief recommendation and action plan. They may also offer to review your credit report and credit score with you, if you wish.

When applicable, your counselor will also provide educational materials and referrals to additional resources and services. Each person’s financial situation is unique and so each counseling session is tailored to meet your specific needs. Typically, a full counseling session lasts between 30 minutes to an hour.

Making the Decision & Getting Started

If you are still deciding whether or not a Florida debt management plan is right for you, that is ok. However, there is a difference between taking time to make up your mind and simply procrastinating. Abraham Lincoln once said, “You cannot escape the responsibility of tomorrow by evading it today.” Making the decision to get started begins with ruling out any good reasons you still have for not moving forward. Once you have done that, then you are simply procrastinating. However, some genuine questions you may still need to answer prior to making up your mind are as follows:

• Is your budget realistic? Your budget is an important factor in the success of your Florida DMP. If you feel it is not realistic, talk to your credit counselor.

• Is bankruptcy a better option for you? If you have a lot of debts that cannot be included in your Florida DMP ask your credit counselor if a Florida bankruptcy is a better option. Alternatively, you can talk to a competent bankruptcy attorney before starting your DMP.

• Are you comfortable with all the fees and costs associated with your Florida DMP? Before starting your DMP, you should be aware of the set-up fee and monthly maintenance fees you will be charged. If you feel they are excessive or you simply cannot afford them, ask your credit counselor if they can be waived.

• Do you have questions you haven’t asked? If you have questions you were reluctant to ask at credit counseling, ask them now. Your credit counselor should welcome your questions and be able to answer them honestly even if you may not like their answers.

Put Together Your Florida Debt Management Plan

To put together your Florida debt management plan, you will need to provide your credit counselor with information about your accounts and make personalized selections related to your plan, including your payment amount and due date. Once your plan is created, your credit counseling agency will contact each of your creditors to establish plan benefits and obtain each creditor’s acceptance. Some of the more common things your credit counselor will require to get started are:

• Your pay statements showing your monthly income;

• Your bank statements;

• Your credit cardholder agreements detailing the terms and conditions on your credit cards;

• Your credit card bills showing your current balances, minimum monthly payments, due date, late fees and penalties;

• Your most recent credit report;

• Details related to other debts you pay every month such as student loans, payday loans, auto loans, medical bills or personal loans.

After you have submitted our documents to your credit counselor, you will be provided with updates during the set-up process and you can refer any creditor inquiries to your credit counselor. Most credit counseling agencies also offer online access that allows you to monitor the progress of your Florida DMP, and if necessary, to make account changes.

Begin Payments

Your credit counseling agency and everyone else who has worked with you on your Florida DMP has one single purpose, to see you succeed at becoming debt-free. Your first step to accomplishing that goal will happen when you begin making payments on your Florida DMP. Missing or failing to make a payment once you begin your Florida DMP can make things worse for you. Even missing one payment, or not making the full payment, can cause you to fall behind with your Florida DMP and make it difficult to get back on track. To prevent this, try to make your payment early. And make sure you know when your payment is due, how much the payment should be, what forms of payment are acceptable, and who the payment should be made out to.

One final note: All of your creditors may not have agreed to your Florida DMP when you begin making payments. That is normal and you should not skip or hold your payment until they all do. Your credit counseling agency will contact the creditors to establish the plan with them and get an agreement in place. Non-profit credit counseling agencies have established relationships with a lot of banks/lenders, so they should have an idea of approximately how long this process will take. Stay in communication with your credit counselor. If you want to get per-creditor updates, talk to them about this, so everyone is on the same page as you make your payments.

How to Stay Current with Your Florida Debt Management Plan

Staying current with your Florida debt management plan is crucial to the success of the plan itself, so it is never too early to start thinking about how to stay current with your Florida DMP payments. Obviously, the most important element of your Florida DMP designed to help you stay current is the payment itself. You and your credit counselor should have designed your debt management program plan with a payment amount that is well within your monthly budget. If you realize that your budget is not realistic or your payment is too aggressive, talk to your credit counselor. In addition, make sure the due date for your payment makes sense. Having your Florida DMP payment due on the same day of the month as your rent, mortgage, car loan or other large expense is generally not a good idea. Finally, plan now for unexpected expenses or emergencies. Many debt management plans now allow you to designate a portion of your payment for savings. Ask your credit counselor about this as well.