What is a Specialized Debt Management Program
Normal / traditional debt management program is made for those who have debts which are exceeded their repayment capability. Traditional debt management normally works hand-in-hand with credit counseling to greatly help the debtors to solve their debt issues. But there's another specialized debt management program which dedicated for those who have good credit. If you want to maintain a number of credit lines for business or personal use, specialized debt management program can be your option.
A specialized debt management program works pretty much such as a traditional debt management program; however, there are several extra steps had a need to properly close the accounts also to be contained in the debt management plan before a proposal is submitted to the credit grantors to be able to help protect the consumer's credit history.
In the original debt management plan, many credit grantors will close your accounts and noted a "closed by creditor" on your own credit report that will hurt your credit history and cause you harder to obtain new credit later on. But if you're the main one who close your account, your credit history will not be affect. This is one way specialized debt management program is exercised to make sure that your credit account is closed on your own rather than by the creditors, which means that your credit ratings will undoubtedly be protected.
Major differences between traditional and specialized debt management program
Although there are several similarities between traditional and specialized debt management programs, but there are some major differences between both of these debt management programs. Identify their difference will assist you to determine which plan is right for you personally:
You need not close all exiting lines of credit
Under the original debt management program, as soon as you enrolled in to the plan, you will have to close all of your credit lines. Whereas, in a specialized debt management program, the program will assist you to decide which credit account it is possible to, or should keep open for emergency or business purpose.
Extra steps will undoubtedly be taken up to minimize credit damage
Under a specialized debt management program, extra steps are participating to close your accounts before submitting your debt management proposal, which means that your credit file will indicate the accounts are closed by you rather than your creditors and obtain your credit scores protected.
Enroll into specialized debt management plan via the phone
Normally, the original debt management plan will demand one to attend a face-to-face appointment before you enroll in to the plan. In a specialized debt management program, it is possible to complete your enrollment via the telephone.
Daily Payment To Creditors
A specialized debt management program requires one to make electronic payment in daily basis to creditors instead of weekly like what's implemented in traditional debt management plan. With daily payment and the simple of using electronic transaction, it can help to make sure that all payments are created before they're due.
Specialized debt management programs are intended for some people that have good credit and must maintain a number of credit lines for business or personal use.