6 Advices for Debt Management Program

6 Advices for Debt Management Program

There are many companies in the market which offer a different kind of debt management programs. But, choosing a debt management company is not an easy task. There are many companies that have been sued by the FTC and Attorney Generals because of their fraudulent activities. It is very important to make sure that the debt management program will not land you in a financial situation worse than before.

Choosing a Debt Management Program

In order to choose a debt management company, which can really offload your debt burden, you should keep in mind the following things:

  • Don’t forget to check the reliability– To be sure of the company’s reliability, check its BBB rating. Find out how many complaints have been listed against the company and how many of them have been resolved. You should also gather information about the company from your local consumer protection agency and the State Attorney General. If you find that the debt management company holds several unresolved complaints, don’t rely on them for solving your debt problems.
  • Don’t get carried away by the non-profit status– Don’t be misguided by the non-profit status of the debt management companies. There are many non-profit debt management agencies that charge a high level of fees for providing debt management services. You should keep in mind that the non-profit agencies are also running their business to make money. The only difference is that these agencies distribute their earnings in a different way. In many cases, the debt management companies use their non-profit status as a marketing tool.
  • Get a written contract– Before enrolling for a debt management plan, make sure that you get a written contract. Carefully read all the terms and conditions before signing the contract and before making any payment. If the debt management company refuses to give you a written contract, just move on.

The Other Advice for Debt Management Program

  • Remember removal of negative listing cannot be guaranteed– If a debt management firm promises you to remove negative items from your credit report, you should better avoid them. This is because no debt management company has the authority to remove negative listings from anyone’s credit history. They can only try to negotiate with the creditors and the credit bureaus. They cannot make the commitment.
  • Make a point that the debt management firm requires complete information– Always remember that a debt management company requests all your current account statements before telling you about fees and debt reduction time. If a company gives you a quote without knowing about your debt accounts, interest rates on your loans, and your creditors. Then you should not consider it as a reliable one.
  • Think before you stop making payments– Your debt management company may tell you to stop paying your creditors, once you enroll in the debt management plan. But don’t stop making payments unless the debt management firm starts paying on your behalf.

Always remember that it is worth going an extra mile for judging the trustworthiness of a debt management program

Personal Finance