There are several debt management plans which you can avail to get rid of your personal finance, business debts and all to keep them all under control. Such effective and well-structured plans are made by your income and expenditure, assets and liabilities. If you already have a management plan in pace, then you may find yourself in an overwhelming situation to clear your debt and also buy your dream house as well. Debt management plan or DMP as it is most commonly called is best prepared with proper consultation with your credit counselor and taking into consideration your secured and unsecured debt and all your expenses.
Creating A DMP
You and your credit counselor would take into consideration your income and review it and then consider all your payments. Your payments would include student loans, unpaid hospital bills, rent and mortgage payments, utility bills, food and transportation cost, personal care and clothing and much more. Out of all these payments then a careful assessment of those costs which you can do without has to be identified and curtailed. This would leave the amount of money in hand that you be able to pay off your debts. DMP is usually for the long term, and you must not expect results overnight.
Reestablish Financial Standing
When you follow a DMP, you have to make payments to the agency that in turn would make the payments for your loan and debts. The benefit of such a counselor is that they disburse money to the creditors according to the rate of interest and are also capable of negotiating for lowering the payments that you have to make. All your payments would be made on time, and therefore you avoid the risk of penal charges and accrued interest being added to your account and increasing the debt amount. A properly structured and designed DMP would enable you to pursue your dream even being in debt situation.
Mortgage Loan And DMP
It may be difficult for you to get a mortgage loan while you have a DMP as in most cases the mortgage loan providers consider DMPs as Chapter 13 bankruptcy. This makes getting traditional mortgage loan a bit difficult, but you may qualify for a loan which would be guaranteed by the FHA after a period of one year. There are also some alternatives to the traditional home loans which you may avail while you are in DMP. However, it depends all on the careful calculation and consideration of your credit counselor.
Contract For Deed
This contract for deed is the last glimmer of hope that you may have while you are in DMP. Such arrangement is also referred to as the lease to own or lease purchase of property. You must be careful about the overly restrictive terms for the contract in such cases. The last straw is to wait until your clear your debts through DMP and then you would not have to look for any workaround as your stable financial condition would enable you to get a traditional mortgage loan.
People who are struggling to clear off their debts are going for consolidation loan and are making things easy for themselves. Debt consolidation loans for bad credit is really doing well and is a big relief for those who are not having good credit. So, if you are also one of those who are having bad credit then it’s time search a bit and get the best debt consolidation loan for yourself and have a peaceful and tension free life.