Posts Tagged ‘Debt management solution programs’

How To Make A Debt Management Solution Work?

Debt management solution programs became popular after the introduction of the new bankruptcy laws in the year 2005. Since then, many of these programs have helped debtors to get rid of their debt problems, but at the same time, there are also many other debtors who choose wrong programs and eventually end up getting their problems aggravated. Considering the very fact that there are uncountable options available to you in the market and that many of them are unscrupulous and fraudulent ones, it is not at all an easy task to choose the right DMP (debt management program). Many companies are genuine ones but they often go out of business because of poor management skills. Therefore, you have to be very careful with your selection. Following is a brief rundown on how to go about it.

Sign Up With A Reputable Company

If you want to make a Debt management solution work for you, the first thing you have to do is to make sure that the company you are signing up with is a reputable and well-established one. For this, you must do a thorough background check and find out information about their experience, specialization, and quality of the services they provide. You can do this by checking their records at the State Attorney General’s Office of Consumer Affairs or the Better Business Bureau.

Work Hand In Hand With Your Counselor

When you sign up with a debt management program, the company appoints a financial counselor to look after your case. Your co-operation is crucial here. If you do not co-operate well and do not work closely with the counselor, none of the strategies might work for you regardless of how experienced or qualified the counselor is. Make sure that the budget you are working on is a realistic one and that the goals you are trying to achieve are practically attainable based on your specific financial situation.

The Agreement Must Be In Writing

Make sure that the agreement regarding the debt management solution plan is in writing. The agreement must clearly explain all the terms and conditions in a very clear, easy-to-understand language. If you have any confusion understanding a specific term or clause, do not hesitate to ask for clarifications. The agreement must include a written list of all the “guarantees” and “promises” the company is making. You are strongly recommended never to sign up for a program just on verbal assurances. Get everything in writing.

Do Your Creditors Agree To The Program?

Before you sign up and pay for a specific debt management program, you must first contact all your creditors one by one and ask them if they agree to work on that program. It is very important for you to keep in mind that creditors do not have any legal obligation to agree to just any debt management solution plan you or a company on your behalf propose to them. They have the right to reject your proposal, to accept your proposal as it is, or offer you a counter proposal. A reputable debt management company is usually able to convince creditors regarding this. But, you are recommended to confirm things on your own in order to avoid unpleasant surprises at a later stage.

Check If The Company Keeps “The Promises”

Many companies promise that they will get the late fees and other penalty charges waived off as part of their plan. Many even claim to get the interest rates reduced significantly. But, unfortunately, there are a few unscrupulous companies out there that do not do what they promise. Therefore, it is always wise to do a thorough monitoring. Review the monthly statements thoroughly in order to find out if the company is really keeping its promises. If the charges have not been waived off as promised, you must immediately contact the counselor appointed for your case and inquire about the same.

Last, but not the least, it is very important for you to understand that no debt management solution program can work for you if you fail to make the adjusted (reduced) monthly payments in a timely manner. If you start making defaults again, you can be in a very serious trouble, more serious than ever before.

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