How to Become Debt Free With a Debt Management Plan in New Hampshire

Find a Credit Counseling Agency

The first step in deciding whether a debt management program is right for you is to find a reputable credit counseling agency. When checking out credit counseling agencies, whether they are for-profit or nonprofit, ask questions. Ask about fees, as well as what happens if you can’t afford them. You may want to ask how your counselor is compensated. Commission-based counselors may try to sell you more expensive services that aren’t right for you. The agency should also provide materials that answer FAQs for free if you ask. If the agency is nonprofit, ask if they are accredited – it means they are held to a professional standard of quality. The National Foundation for Credit Counseling (NFCC), the country’s largest nonprofit financial counseling organization, only accepts members certified by the COA as having best practices. Beyond a counseling organization like the NFCC, you can also check the Better Business Bureau and the New Hampshire Attorney General’s website for a history of complaints against the agency. Upsolve has resources so you can search here to find a nonprofit counselor near you. Deciding who is going to help rebuild your financial life is important, so take your time and do your research. 

What to Expect at Credit Counseling

A credit counseling session may sound intimidating, but it’s just a conversation in person at the agency or over the phone with your credit counselor. You’ll go over your personal finances, do a bit of financial counseling, and discuss your options for debt relief – it shouldn’t take more than an hour. Also, confidentiality policies mean your creditors will never know you had the conversation. Before it happens, the conversation will go more smoothly and be more productive if you take time to gather some basic documents for the counselor. Ideally, you can find and bring paystubs or income information, a list of your expenses, a list for each creditor of the total secured and unsecured debts you owe, interest rates on those debts, and the minimum monthly payment for each debt. If you can’t find these at home, a lot of this is on your credit report, which is easily available online. The session is designed to review your finances, set goals, and explore options that are likely to benefit you. Making the final call, though, is up to you.  

Making the Decision & Getting Started

While you’re deciding whether a New Hampshire DMP is the best one of the debt relief options for you, ask questions! Now is your time. Does your credit counseling agency charge a set-up fee or monthly fees – if so, what are they? These fees are usually no more than $25-50 a month and are normally included in your monthly payment. What relationship does your credit counseling agency have with your particular creditors? A good professional relationship can make negotiating and acceptance of your plan much easier. Listen to the answers, but don’t feel you must decide immediately. If your credit counselor pressures you to make a decision at the end of the counseling session or keeps pushing a choice you aren’t sure about, it’s a bad sign.

Don’t forget to ask yourself questions, too. Will you be able to stick to budget? Are the payments realistic for you? Is this something your family can commit to as well? The penalties and default interest rates that come with deviating from the plan may leave you in worse financial shape than you started, so be sure about your choice. Also, have you explored all your debt relief options? In some cases, even bankruptcy may be the best fit. Upsolve can help you find a New Hampshire bankruptcy lawyer who can answer your questions and help you make an informed decision. Ultimately, though, nobody can make the choice but you. If you feel this is right, take the plunge and let’s get to work!

Put Together Your New Hampshire Debt Management Plan

When you and your credit counselor put together your New Hampshire debt management plan, don’t be surprised if they ask for some very personal financial information. Bank account information and detailed credit card information are needed to create an accurate plan. You may even need cardholder agreements from your credit card companies to make sure your counselor has all your specific account terms when speaking to your creditor. Companies often mail them to cardholders annually and at the time you open the account. You can call your credit card provider and ask for a copy if you don’t have it.  

When you get dates and figures on paper, look carefully at the due date and payment. Will they realistically work for you? Can you stick to them every month? It’s always a good idea to create a comprehensive budget and revisit it constantly to make sure it really does include everything. It’s a good idea to track your spending for a few weeks to see if you unintentionally left any expenses off your budget. If anything bothers you, say something. This is also the time to ask questions about your total monthly fee, when creditors will start being paid, or working with an alternate pay schedule if your job doesn’t pay monthly or biweekly. Be sure you like what you see, because your creditors will see the plan after you’ve created it. If they accept it, you’re in it for the long haul. If you’re satisfied, take a deep breath – you’re on your way!

Begin Payments

Now it’s time for the rubber to hit the road - time to start making payments with your New Hampshire debt management plan! Your credit counselor should’ve given you the due date and monthly payment amount. This is the most important thing you have to do in the entire process. Pay on time. Every month. If you can afford it, pay early or make extra payments! 

Once you do, the agency will start reaching out to creditors and negotiating on your behalf to get them to accept your debt management plan. This can take time, but don’t panic. Your counselor should be able to give you a general time period to expect results in this department, and they have experience working with creditors like yours. You can always ask for updates on creditors. It’s also important you don’t worry too much if initially your credit score drops – talking to creditors and getting their acceptance takes time (and they’re noting that you aren’t paying them during that time), but once they are on board and you pay down your debt your score should rise. Many people even see their credit score is already higher than when they started before they finish paying off their debt! 

How to Stay Current with Your New Hampshire Debt Management Plan

You’ve done a lot of the hard work by creating and beginning payments on your New Hampshire debt management plan, so take a moment to congratulate yourself. That’s a big deal! Your job now is to make sure you make payments on time every single month until you are debt-free. Set a calendar reminder if you need to. You examined your finances with your credit counselor during your counseling sessions and should have a budget together. Use spreadsheets, budget software, or any way that works for you to stick to it. Remember to set aside some funds for expenses you know are coming as well as emergencies (because life happens). 

Talk to your credit counselor if your expenses or income change, or if you have an emergency your fund can’t cover. Using a credit card to cover an emergency expense might violate the terms of your New Hampshire DMP, so check first! Above all, make those payments and remember to celebrate the milestones of progress as they come. You can ask your counselor to let you know when those will happen or read the monthly reports you’ll receive on your DMP.