Posts Tagged ‘successful debt management programs’

How To Succeed With Debt Management Programs?

There are hundreds of debt management programs (DMPs) available out there, each of them claiming to be the best option to handle your debt situation, but obviously not all of them make a suitable choice for you. There are plenty of factors that you need to work on before you sign up with a specific program. But again, just signing up with a good program is not enough. You must show some great financial discipline in order to make this debt relief option work for your specific situation. DMPs became popular after the introduction of the new bankruptcy laws in the year 2005. But, because of fraudulent activities and poor management, many of those businesses have now gone out of business. It also means that the hundreds of companies that are currently in this type of business may include lots of unscrupulous organizations also. Therefore, you have to be very careful when it comes to choosing the right program. You can follow these tips to choose the most suitable program and then to make the most of it.

Choose A Reputable, Well-Established Program

The first thing you have to do is to choose some reputable, well-established debt management programs and then do a thorough comparison shopping. Different programs work differently and they use different methods. So, you must compare them thoroughly to find out which one can be the most suitable for your specific situation. Make sure you do a background check of the company you are signing up with. You can check their past records with the State Attorney General’s Office of Consumer Affair and with the Better Business Bureau. You obviously should avoid those companies that have lots of consumer complaints against them.

Sign A Written Contract

Do not believe every word that debt management companies say. Never go for verbal insurances. Ask them for a written agreement that must include complete details about the program. Pay special attention to the clause that describes the method the company uses to charge their fees. The contract of debt management programs must also include the list of your debts they are managing the list of your creditors they will be communicating with on your behalf.

Make Sure Your Creditors Agree To Such Arrangement

It is important to note that many creditors may not agree to work with a debt management company. Therefore, before you sign up with a program, you must first contact your creditors to find out if they have any problem in working with a DMP. Always remember, lenders do not have any legal obligation to accept any DMP that is proposed to them. In some cases, they may agree to the program if you agree to make the some changes as suggested by them. They may simply refuse or make a completely different counter offer. So, get in writing that they agree to a specific program before you start making the payments as per the new plan.

Have A Realistic Budget

Most people fail even though they succeed in choosing the right debt management programs just because they work on an unrealistic budget. Therefore, it is very important for you to work closely with your counselor in order to make sure that your financial goals are attainable and that your budgeting plans are realistic. Do not predict tax refunds or windfalls; just work on your regular monthly income that is available with you.

Verify The Changes

As per the program, many new changes are likely to be introduced, such as reduction or elimination of over-the-credit-limit charges and late fees. Do a thorough verification that the rates and other terms have been adjusted according to the new plan. Every time you receive a monthly statement, review it thoroughly to make sure everything is working fine according to the DMP.

Monitor The Progress

It is true that companies that provide debt management programs work as mediator between you and the creditors. But, it is not wise at all to just sit back without caring to monitor whether the payments are being made to your creditors in a timely manner or not. It is very important for you to keep in mind that even though you are working with a debt management company, you still have your personal obligations to your creditors intact. You need to make sure that your lenders are getting their payments in time. For this, you must maintain regular contact with your creditors.

Always remember, if everything else is working fine but you again start making defaults on your payments, your debt problems will only increase. Therefore, you must exhibit some great financial discipline and commit to on-time payments to the debt management programs.


Custom Search
Bankruptcy

Basic Things You Must Know About Bankruptcy Dismissal

When you file a petition for bankruptcy and the court rejects your petition on certain grounds, it is legally termed as bankruptcy dismissal. Dismissal means your case is officially closed and that the court will make no further rulings on your case. Some of the most common reasons why a petition is...

Bankruptcy
Credit Repair

Building Credit With No Credit

When it comes to building credit with no credit, there are several online canadian pharmacy factors that you need to take into account. Just because you do not have any credit history at present, it does not mean you will never have one. No one is born with a readymade credit history. You have to gi...

Credit Repair

A Loan To Defeat All Loans Debt Relief Loan
Payday loans fax-free payday loans and instant online payday loans are everywhere be it on the Internet newspapers or television. Today when the economy is in turmoil these loans look like the saving gra... Read more

Tips On How To Consolidate Payday Loan Debt
You may need to consolidate payday loan debt when you are caught in the middle of a financial crisis arising out of your inability to repay multiple loans. Debt consolidation loan allows you to consolidate all... Read more

Do Not Put Up With Debt Collectors Harassment
There was an emergency and the need arose to take a payday loan. It seemed to be the fastest and the best option available then. However now the debt collectors harassment is horrendous. The fact that using t... Read more

Consolidate Payday Advances To Save Yourself
Payday advances are loans taken against a persons paycheck. They have a way of digging into your paycheck month after month. They usually have exorbitant interest rates though the sites offering the services... Read more

Can I Consolidate Payday Loans
Can I consolidate payday loans is a question you are sure to ask yourself when faced with a trying financial situation. When payment of loans becomes difficult it is possible to consolidate and replace many... Read more

What are the pros and cons of debt consolidation?