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

Find a Credit Counseling Agency

Locating a reputable credit counseling agency is step one in developing your Mississippi debt management plan. Two types of agencies exist: for profit credit counseling agencies that charge you for their services and nonprofit credit counseling agencies that get funding from other companies or organizations and only charge for some services, but not the initial credit counseling session. Both can help you develop a debt management plan. Credit counseling agencies offer services in many forms – in person, online, and even over the phone. Upsolve can help you locate a credit counselor near you that can help. 

If you are looking into any credit counseling agency, make sure to ask questions. You’ll want to know about initial costs and any additional fees that may come up down the road, what happens if you can’t afford their fees, and how your credit counselor is compensated. At for profit agencies, incentives can cause counselors to try and offer additional, costly options for their own gain.

When looking at nonprofit credit counseling agencies, try to find an accredited one because they’re required to comply with quality standards. The largest nonprofit financial counseling organization in the country, the National Foundation for Credit Counseling (NFCC), only allows certified credit counseling agencies as members. The NFCC contracts with an independent company, the Council on Accreditation (COA) that evaluates credit counseling agencies to see if they’re qualified to be accepted into the counseling organization. It’s also a good idea to check with the Mississippi Attorney General’s office for a history of any agency complaints. 

What to Expect at Credit Counseling

Don’t stress about meeting your credit counselor – the initial counseling session is just a 45 to 60-minute conversation about your financial situation and options that may work for you. Your creditors will never know you spoke to them or the details of your session. When you meet your counselor, it can be helpful to have documents showing your income, expenses, and debts handy. If you can, get a list of the total debt you owe each creditor, the interest rate on that debt, and minimum payments due each month. Your credit report is a helpful way to get started building a complete list of secured and unsecured debts – you can get one for free each year here. 

Once you go over your financial picture with your counselor, you’ll set some short- and long-term financial goals. At the end, your counselor should offer suggestions on solutions they think may be right for you – a debt management program may be one. If you opt for this choice, you’ll work together to develop an action plan to repay your debts. You should leave with an idea about the next steps from your credit counselor. 

Making the Decision & Getting Started

You should ask a lot of questions before making a final decision about a Mississippi DMP – both of your counselor and yourself. If you’re working with a for profit credit counseling agency, you’ll want to know how your counselor is paid. If it’s on commission, they may be trying to steer you towards a more expensive debt solution. No matter the situation, your counselor shouldn’t pressure you to make a final decision at the close of the initial counseling session. You should be comfortable with your choice and good counselors respect that that may take time. You’ll want to ask about any setup fee or monthly fee associated with your Mississippi debt management plan – it’s legal to charge them, but they’re usually small and built into your single monthly payment. You may also want to ask about the credit counseling agency’s relationship with your creditors. The more you know, the better. 

Next, you’ll want to start asking yourself questions. Can you stick to a budget? Can you make this commitment? If the answer to either is no, you may find yourself in worse financial shape than you started if you can’t follow through on your debt management plan. Remember you have other options as well – there are many debt solutions, and in some cases, bankruptcy may be the best choice for you. Upsolve can help you find a Mississippi bankruptcy attorney to advise you if you want to know more. 

Put Together Your Mississippi Debt Management Plan

When putting your Mississippi debt management plan together, your counselor will need important financial information from you in order to put a plan together you can successfully follow. This won’t be the general information about your income and debts from the initial session – you’ll need to gather information on your bank account, credit card accounts, and outstanding debts. Your counselor may even ask for cardholder agreements credit card companies provided you when you opened your account. These are agreements you and the company have that explain the terms you agreed to for your relationship with them. You can find current examples for all major creditors here. 

Remember that outside making your payments on time, this may be the most important part of the process – be thorough, review details, and think about if the terms actually work for you. Your counselor can answer questions about when they’ll start paying creditors, the amount of your fees, and what to do about payments coming due in the meantime. If you have a question or concern, now is the time to ask. The decision is yours, so be informed!

Begin Payments

Your credit counselor should clearly explain your monthly payment amount and the due date – make note of them because they are critical to staying on track with your Mississippi debt management plan. Your credit counseling agency will contact creditors to try and have them accept your plan once you begin making payments. During your initial counseling session, your counselor should also have outlined a timeline for the outcome of negotiations. They have well established relationships with banks and lenders, so they should be able to provide an estimate so you’re not waiting anxiously by the phone. You can also call your credit counseling agency to ask about updates on individual creditors. 

The most important job you have is paying on time. Pay early if possible. Even though your credit score may initially go down as creditors are contacted and close your account, don’t panic. Keep paying. Your credit score should rise as the balance of your total debt starts to shrink. 

How to Stay Current with your Mississippi Debt Management Plan

Congratulations! A lot of the hard work is done once you’ve established your Mississippi debt management plan with your credit counseling agency. Now you just have to stick to the action plan and follow through. You discussed with your credit counselor – now that you know the amount of your monthly payment, you should map out your finances to make sure you can keep your Mississippi DMP current. Personal finance planning is important; tracking your spending through a budgeting app, a spreadsheet, or even a pen and paper ledger may be helpful to detect unexpected spending. Pay close attention to the monthly reports you’ll receive from your credit counseling agency – they can help you see if you’re on track and give you a sense of accomplishment as your balances shrink. 

Remember to save some money for an emergency fund – life is unpredictable, and a large expense could come up unexpectedly. If you end up with disposable income, consider making extra payments. However, don’t forget to reward yourself; talk to your credit counselor to see if there are small ways to celebrate milestones in your repayment!