Debt Management Program Requirements

Debt management programs are known for their ability to help customers get out of credit card debt. However, debt management programs are not for everybody. Here are some ways to tell if a debt management program is right for you.

Debt Management Programs

Debt management programs are heavily advertised on television and radio, with their claim of reducing your interest rates being their main selling point. Another perk of debt management programs is that they can rebuild your credit while lowering your balances. The bad part about debt management is that you can't use your credit cards anymore, which usually requires a lifestyle adjustment as you learn how to live without credit.

Balance Requirements

There generally is no minimum amount of credit card debt required for joining a debt management. According to Christian Debt Free Counseling of Ohio, the goal of credit counseling is to assist customers regardless of how much they may owe. However, if your balances are low and you only owe one or two creditors, you may be able to work out a payment plan without the help of a debt management program.

Timeliness Requirements

While past due balances are a requirement for debt settlement, you don't have to be behind on your bills to enter a debt management program. However, if you are behind, a debt management program can help you re-age your accounts so that they appear as current instead of past due. In addition, debt management can reduce or eliminate some of the late fees that have been charged to your accounts.

Length Requirements

Most credit counselors will put you on a debt management program that will have you out of debt within five years. However, you have no obligation to stay on the program any longer than you'd like. If you want to cancel your plan, just notify your counseling agency; however, you will lose the interest rate break you acquired when you joined the program. In addition, if you miss payments to your counseling agency, you may be removed from the program; many creditors will drop you after just one missed payment.