How to Become Debt Free With a Debt Management Plan in Georgia

Find a Credit Counseling Agency

To make sure you are working with a reputable nonprofit credit counseling agency, it is a good idea to make sure the agency is a member of the National Foundation for Credit Counseling (NFCC). The NFCC is the largest and oldest nonprofit credit counseling organization. To be a member of the NFCC, the Council on Accreditation (COA) must accredit the counseling agency. Note that credit counseling is sometimes referred to as financial counseling. Always ask about the cost of a credit counseling session before signing up. The initial session should always be free. If the first session isn’t free, think twice before using this agency. Ask what documents you need to bring to your first session.

It is important to know how your counselor is being paid. If a counselor receives a bonus for signing up new users, you shouldn’t use this agency. In these cases, the counselor may sign you up because it puts money in their pocket not because it’s the best course of action for you. It is normal to pay a nonprofit credit counseling agency for Georgia debt management plans and some other services beyond basic credit counseling.  It isn’t normal to pay for basic credit counseling. The credit counseling agency must charge some fees for extra services so it can pay its employees. This legitimate compensation doesn't put the counselor in a position where they may make extra money for signing you up for a service that you don't need.

What to Expect at Credit Counseling

You will need your recent pay stubs, bills from each lender, and your banking statements when you meet with your credit counselor for the first time. Having a copy of your credit report with you can also be helpful at this meeting. You may meet your counselor at the office of the credit counseling agency. Telephone meetings are also common. Web meetings with counselors are becoming more common. The typical initial credit counseling session takes forty-five minutes to an hour.  You will work with a trained and certified credit counselor to assess your income, expenses, and debts. Expect your counselor to pay particular attention to the interest rates on your bills. After the assessment phase, you and your counselor develop an action plan to achieve your financial goals. Everything at this initial credit counseling session is confidential. Your lenders are in no way involved at the initial credit counseling session. Your initial session will end with your counselor making a recommendation for the best debt relief option for you. One of these recommendations may be a Georgia debt management plan.

Making the Decision & Getting Started

You have the right to take your time and consider your debt-relief options. It isn't a good sign if the credit counselor pressures you to make an immediate decision. A good nonprofit credit counseling agency will not press you to make a decision that you are uncomfortable with. You need to give careful consideration to your choice of a debt solution. Can you stick to the budget that would be necessary for a particular debt reduction plan? If the plan fails, you will often be in a worse position than had you not entered into the plan. Can you and your family make the necessary sacrifices to make the plan succeed? Have you considered all available debt solutions? Have you considered bankruptcy? Have you met with a bankruptcy attorney?

Put Together Your Georgia Debt Management Plan

If you decide to use a Georgia debt management plan, you will need more detailed information at the session where you set up your plan. Getting your DMP set up right is important. Only paying your monthly payments on time is more important. You will need to provide detailed information for the lenders that you include. You will need your credit card bills, medical bills, and bank account statements. At this meeting, you will fine-tune the details of your debts. You will make sure that any expenses you may have forgotten at the initial session are in your budget. You will also make sure that the payment due date is one that works for you.

Make sure that you know what your monthly payment will be. Make sure that you know what part of your monthly payment will be the monthly fee paid to the credit counseling organization. You need to know when the counseling organization will start making payments to your creditors. Ask your counselor if you should continue to make payments on your monthly bills during the time between the start of the plan and the date the creditors accept your plan. Paying these bills during this time could cause you to make a double payment but not paying the bills during this time could have a negative impact on your credit report. Your counselor will make a recommendation whether these bills should be paid or not based on your specific financial situation.

Begin Payments

After your debt management program begins, always make your payments on time if not early. Use the first few months of your plan to get used to following your budget. The credit counseling agency will contact your lenders to reach agreements with them after you start making payments on your Georgia DMP. Credit counseling agencies have relationships with most lenders. Due to their experience with the lenders, they should be able to give you an idea of how long this process should take. Stay in contact with your credit counseling firm to stay informed about your plan. Check with the agency to find out when all the creditors have accepted your plan.

How to Stay Current With Your Georgia Debt Management Plan

To have a successful Georgia debt management plan, it's a good idea to make sure that your due date for the DMP doesn't fall on the same date when other large bills are due. Make sure to set aside funds to cover expected expenses that don't occur monthly, like car maintenance. Only after setting aside funds for these expenses, consider how much you have left for your variable monthly expenses like shopping and dining out. Pay close attention to the monthly reports your counseling organization sends you about your DMP. You need to know who is getting paid and how much they are getting paid. After you have accumulated enough in your emergency fund, it is a good idea to make extra payments when possible. This will help to keep you from falling behind in the future and may allow you to finish your Georgia DMP early. If you have an emergency and can't make your payments, contact your credit counselor. They will have recommendations for what you can do.