FiCEP 2000 - Chapter 13 - 25
What are the life stages to set goals?
- Elementary School
- Middle School
- High School
- Adulthood
- Retirement
What are the cash flow cycles ?
Paycheck to paycheck
Monthly
Quarterly
Annually
Payday Lenders
Payday lenders offer quick cash but at a high cost, with additional fees and an endless debt
cycle.
They typically do not report loan information to credit bureaus, making it difficult to establish
credit.
Some people turn to payday lenders to avoid judgment by traditional financial institutions.
Debt Management Options
- Lifestyle adjustments
- Debt consolidation loans
- Debt management programs
- Debt settlement
- Bankruptcy
Lifestyle Adjustment
Debt Management Options
After working together to develop a spending plan and strategy, if a member is committed and
has the resources to pay off their debt, a counselor can guide them through a self-administered
repayment plan. If the member is unable to commit or lacks the necessary resources, the
, counselor should explore other options. Regardless of which option the member chooses, they
will need to make lifestyle changes.
Debt Consolidation Loans
Debt Management Options
Some members can use debt consolidation loans to pay off creditors. The loan may require
closing some accounts, so choose carefully to avoid affecting credit score. Benefits include
reducing monthly payments, interest, and time to eliminate debts. Remember, this loan is for
restructuring debt, not creating more.
Debt Management Program
Debt Management Options
Debt Management Programs (DMP) aid in debt repayment while preserving or improving credit
scores. Non-profit credit counseling agencies work with creditors to devise repayment plans with
smaller monthly payments, lower interest rates, and eliminated fees.
Debt Settlement
Debt Management Options
Members can negotiate with creditors to pay less than owed. A creditor may accept significantly
less as a full settlement, but this may require a lump sum or short-term payment plan. Debt
settlement may decrease credit score and have tax consequences.
Bankruptcy
Debt Management Options
Bankruptcy is a legal process that helps those who are unable to pay their debts. It eliminates
debt and provides relief, but negatively impacts credit scores. It's important to explore
alternatives before filing..
Why should counselors create a contract when developing an action plan with memebrs?
Although a signed action plan is not legally binding, it motivates members to commit to the
changes necessary to achieve their goals. Essentially, it is a contract for change.
What are the life stages to set goals?
- Elementary School
- Middle School
- High School
- Adulthood
- Retirement
What are the cash flow cycles ?
Paycheck to paycheck
Monthly
Quarterly
Annually
Payday Lenders
Payday lenders offer quick cash but at a high cost, with additional fees and an endless debt
cycle.
They typically do not report loan information to credit bureaus, making it difficult to establish
credit.
Some people turn to payday lenders to avoid judgment by traditional financial institutions.
Debt Management Options
- Lifestyle adjustments
- Debt consolidation loans
- Debt management programs
- Debt settlement
- Bankruptcy
Lifestyle Adjustment
Debt Management Options
After working together to develop a spending plan and strategy, if a member is committed and
has the resources to pay off their debt, a counselor can guide them through a self-administered
repayment plan. If the member is unable to commit or lacks the necessary resources, the
, counselor should explore other options. Regardless of which option the member chooses, they
will need to make lifestyle changes.
Debt Consolidation Loans
Debt Management Options
Some members can use debt consolidation loans to pay off creditors. The loan may require
closing some accounts, so choose carefully to avoid affecting credit score. Benefits include
reducing monthly payments, interest, and time to eliminate debts. Remember, this loan is for
restructuring debt, not creating more.
Debt Management Program
Debt Management Options
Debt Management Programs (DMP) aid in debt repayment while preserving or improving credit
scores. Non-profit credit counseling agencies work with creditors to devise repayment plans with
smaller monthly payments, lower interest rates, and eliminated fees.
Debt Settlement
Debt Management Options
Members can negotiate with creditors to pay less than owed. A creditor may accept significantly
less as a full settlement, but this may require a lump sum or short-term payment plan. Debt
settlement may decrease credit score and have tax consequences.
Bankruptcy
Debt Management Options
Bankruptcy is a legal process that helps those who are unable to pay their debts. It eliminates
debt and provides relief, but negatively impacts credit scores. It's important to explore
alternatives before filing..
Why should counselors create a contract when developing an action plan with memebrs?
Although a signed action plan is not legally binding, it motivates members to commit to the
changes necessary to achieve their goals. Essentially, it is a contract for change.
