Monthly Archives: June 2013

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How to Choose a Debt Management Program

The idea of handing over all your debts to an agency and having them deal with it can be relieving, but make sure you consider it as a last resort after exhausting all other options. If your credit is not completely damaged yet, it will be once you use a debt agency! The program is meant to get you out of debt and avoid bankruptcy. Here are some things you should keep in mind while choosing a debt management program.

  • Don’t use one. Yes, you read that right. Before jumping into a program, check for the best ways to do this and then do it yourself. Budget, cut expenses, prioritize debts and talk to each creditor and negotiate terms. Many creditors will accept a payment plan when they see that you are honest with them and trying your best. Be sure to learn about loans and choose the best options for you (here is a good article about loans).
  • Choose only licensed programs. Research thoroughly and make sure you choose a non-profit agency who will not charge you exorbitant fees. Check their accreditations and read through the details in detail.
  • Ask for the fees. Check the initial fees as well as the monthly payments. Make sure you aren’t blindsided by special fees. You are getting into the program to be debt free, not to increase them.
  • Ask about how they make payments. Make sure the program makes payments on time and doesn’t get you into further trouble with creditors. Also have them include everything in the contract, every small detail. Don’t rely on verbal promises.
  • Ask about their privacy policy and how they protect your information.

A debt management program should free you from the annoying debt collectors and the overwhelming feelings of being unable to afford your bills.  Find a good plan and make your life easier.