What Do You Need to Look Out For with Debt Management Plans

debt management plans

For some people, they are drowning in a sea of debt. If you are having a hard time getting your debt under control and you can’t keep yourself on your debt repayments (after numerous tries), then you may want to check out a debt management plan as a possibility.

While you may use a debt management plan, you’re still responsible for your finances, so make sure you have the 411 about the company and your case. Here are some tips on how you can find a credit counseling company that would be a good fit for you.

How Debt Management Plans Worksdebt management plans

Typically when someone is on a debt management plan, they send in their debt payments to the credit counseling organization. The organization is then supposed take care of the debts based on a payment plan that the two parties agree to.

What consumers need to make sure is that the organization fulfills the plan and the payments are being divvied up accordingly. While no guarantee, working with an establish organization can reduce your chances of having problems come up.

Questions to Ask Before Signing Up

Before you have a company handle your bill payments you should ask some questions. The Federal Trade Commission offers some helpful suggestions:

  • What services does the organization offer?
  • Are you licensed or accredited to do business?
  • Will I have a written agreement with the plan?
  • Who will be helping me and my case? What are their qualifications?
  • How are your employees are paid?
  • How will you keep my information secure?
  • What fees are involved?

Make sure you’re completely comfortable and happy with their answers. Don’t sign anything unless you’ve read and agreed everything.

Thoughts on Debt Management Plans

You have to decide for yourself whether or not you need credit counseling help from an agency. Hopefully you’ll be on your way to eliminating your debt sooner rather than later. Have you ever used a debt management plan? Did it work well for you?

Photo Credit: Alan Cleaver

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