25 Mar How Debt Counsellors Create Payment Plans

Are you struggling to keep up with multiple debts? Drowning in interest rates and late fees? A debt counsellor can be a lifesaver, but how exactly do they create those magical payment plans that seem too good to be true? Buckle up, because we’re about to unveil the secrets behind crafting a workable plan to get you out of debt!

Like many of our clients, the science behind the creation of debt management plans might confuse you. Luckily, the process is quite easy to comprehend. When you understand how debt management plans are made, it might be easier to talk to your debt counsellor about what suits you best in a plan while understanding the factors they must take into account. Let’s take a deep dive into what debt counsellors consider when creating a payment plan and why!

Debt counsellors are the ultimate weapon in our battle against the debt monster. As the best stress-busters, they’ll help you create a realistic plan that allocates your income towards necessities, debt repayment, and even a little fun money. No more living paycheck to paycheck! Debt counsellors also act as a shield, protecting you from harassing calls and legal action from creditors once you’re under debt review. We’re here to guide you every step of the way, monitoring progress, adjusting the plan as needed, and celebrating your milestones with you.

Step 1: Unveiling the Debt Monster

First, the debt counsellor will sit down with you to discuss your financial situation. We’ll gather information on your:

– Income: Every cent you earn needs to be documented. Whether that’s from your job, your side hustle, or alimony.
– Expenses: Everything counts, from rent and groceries to that gym membership you never use.
– Debts: Including the amount owed, interest rates, and creditor information.

We’ll make this into one big report, then put the pieces together to strategies how we’ll use this to negotiate during Debt Review. You can also get an estimate of your debt review costs with our debt review calculator.

Step 2: The Debt Negotiation Shuffle

Then, it’s time to tango with your creditors. We’ll negotiate for lower interest rates– like bringing down a 12.5% interest rate to 4%, for instance. Lower interest rates mean more money goes towards paying down the actual debt, not just the interest. Also, the debt counsellor will negotiate for extended repayment terms.  Spreading your debt over a longer period creates smaller, more manageable monthly payments.

Step 3: Getting Personal

Yep, we’ll act as your therapist to solve your issues around money and work with you to create debt solutions. The counsellor will help you create a realistic budget that factors in your income, essential expenses, and your new debt repayment plan. This ensures you can afford your monthly payments while still covering your living costs.

Step 4: The Power of One

Debt Counsellors often recommend consolidating all your monthly debt payments into one, easy payment. The counsellor might negotiate with creditors to combine your various debts into one loan with a single, lower interest rate and a single monthly payment. This eliminates the stress of managing creditors and debt collectors’ expectations. This way, you’re aware of exactly how much you owe so you can make regular payments.

Step 5: Getting Down to Business

The debt counsellor will keep you accountable through regular check-ins. If your income or expenses change, the counsellor will work with you to adjust the plan accordingly. We’re here to motivate you, keep you on track, and celebrate milestones with you!

Now you know how we create payment plans, it’s time to consider Debt Review. If you have unmanageable debt, let us assess your situation and create a plan that works for you! Get in touch with us now for help and a debt counsellor to cheer you on.