12 Debt Management Program Tips

A debt management plan may help, but do your research and consider all your options first. If your finances take a turn for the worse and you find yourself drowning in debt, a debt management program may help you keep your head above water. Debt management programs (sometimes called debt management plans) may be able to help you negotiate lower interest rates, get late fees waived, work out a payment schedule that’s acceptable to you and to your creditors, and consolidate your monthly payments into one. Keep in mind, however, that there are a lot of debt management programs that are unreliable or that charge exorbitant fees, and there are some that are just plain fraudulent. Also,keep in mind that the purpose of an agency debt management program is to get you out of debt and avoid bankruptcy. If your credit isn’t damaged, it probably will be by utilizing a reputable consumer credit counseling agency. Because their job is to help you live while paying off your creditors and acting on your behalf. Once you enter into the agreement with an agency, let them handle the collectors.

Do it yourself

The best kept secret in the debt management industry is that you can do most of the things debt management agencies do, and if you do it yourself, you can save yourself a lot of money in fees. Make a budget, cut unnecessary expenses, prioritize your debts, and call your creditors to ask if they’ll waive your late fees, reduce your interest rates, and/or work with you on a payment schedule. You may even be able to get them to “re-age” your account, which means that they report your past-due account as current. There’s no guarantee that they will, but there’s also no guarantee they will if you go through a debt management agency, so you’ve got nothing to lose by trying. Many times creditors will be happy to work with you if you make a good-faith effort to pay them. Also keep in mind that signing up with a Credit Counseling Agency can negatively affect your credit score.

Find a good credit counselor

Almost all debt management programs are administered by consumer credit counseling agencies–so much so, in fact, that the terms “credit counseling” and “debt management” are often used interchangeably. They’re not the same, though. You can and should get real credit counseling before you commit to a debt management program, and a credit counselor can and should help you make a budget and explore other options (such as self-help methods or consolidation loans) with you instead of just pushing you into a debt management program. Thoroughly researching the agency is the most important thing to do before deciding to enroll in their debt management program….. read more ยป