What Kinds of Debts Can a Debt Management Plan Help With?
Debt management programs are designed primarily to assist consumers with high-interest credit card debt, but also could include any form of unsecured debt.
The list of accounts that qualify to be in a debt management program include:
- Conventional credit cards – like Visa, MasterCard, American Express or Discover
- Bank issued cards – like Chase, Citi, Capital One, Bank of America or Wells Fargo
- Credit union cards – like Navy Federal, Consumers and Alliant
- Retail or airline cards – like Walmart, Amazon, Target, Delta, United and Southwest
- Gas credit cards – like Exxon-Mobil, Wawa, Sunoco and Shell
Consumers should be aware that the creditor for each of those cards has a choice on whether to participate in the debt management program. They may choose not to. It is their call.
Other debts that could be part of a debt management program:
- Unsecured personal loans
- Unsecured debt consolidation loans
- Medical debt
- Past-due utilities
Again, the creditor in each of these possibilities has the right to decline to participate. There are no laws that force them to agree.
Debt Management Plans and Collection Accounts
Some debt collection agencies will agree to participate in debt management programs, but it is rare.
Paying a reduced interest rate is the primary benefit of being in a debt management program, but collection agency accounts don’t include interest so there isn’t much gain to the consumer by inviting debt collectors in.
If you want to include bills from a collection agency so that you can eliminate all debts, the nonprofit credit counseling agency will call them and see if they agree to participate.
Do I Have to Include All Debts in a Debt Management Plan?
Consumers should include all unsecured debts in a debt management program, though there is no rule that says every debt owed must be included.
Consumers can select the debts they want in the program, and may choose not to include some of their credit cards. However, creditors insist that all credit cards be closed. Some creditors will allow the consumer one credit card account, but only for use in emergency situations.
In addition, there are some debts – home loans, car loans, student loans – that can’t be included in a debt management program.
The goal of a Debt Management Program is to help you pay down your debt in the quickest and most efficient way possible. To do that, InCharge credit counselors recommend that you include all unsecured accounts. This is a requirement of your creditors, who will monitor the activity on your credit report while you are on the program.
If you use any credit cards or department store cards, your creditors may disqualify you from the program and you will lose the benefits they have provided to you.
Not using your credit cards is a great way to get in the habit of using cash for purchases and sticking to the budget that you have worked out with your InCharge certified credit counselor.
Is There a Limit to How Many Debt Accounts I Can Include?
There is no limit to the amount of unsecured (credit card) accounts that may be placed on the InCharge Debt Management Program. Creditors from card companies are very willing to extend benefits when they know a consumer is earnestly trying to repay their debt.
Placing all credit cards on the program demonstrates an earnest commitment to repaying one’s debts. If a consumer only places select cards on the program, then debt management is not complete.
Successful graduates of the InCharge program include all their unsecured debts. It is a great way to eliminate any temptation to use credit cards and get in the habit of sticking to a realistic budget.
Debt Management Plan to Repay Your Debts
If you are serious about eliminating high-interest credit card debt then it is worth your time to call InCharge Debt Solutions and go through a counseling session.
The certified counselors you speak with will let you know immediately if a debt management program is the best solution for your troubles.
In 2019, InCharge clients paid off more than $118 million dollars of debt.
Call InCharge Debt Solutions to speak to a certified credit counselor and see if the debt management program works for you.
About The Author
Joey Johnston has more than 30 years of experience as a journalist with the Tampa Tribune and St. Petersburg Times. He has won a dozen national writing awards and his work has appeared in the New York Times, Washington Post, Sports Illustrated and People Magazine. He started writing for InCharge Debt Solutions in 2016.