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Finding a Debt Management Company
If you've decided on a debt management plan to reduce your monthly payments on
credit card payments, outstanding student loans and/or medical bills you will want to find
a reputable firm to deal with. Be certain you read all the "fine print" in the
contract you sign to verify there are no hidden fees or charges and of course make sure
your monthly payment history is being reported to all major credit bureaus.
Doing your homework
You can find information about debt management companies on a variety of
websites, and there are government websites (such as the FTC) that offer assistance as well.
If you're having difficulty deciding which debt management company is best for you we strongly
urge you to read
Fiscal Fitness: Choosing a Credit Counselor
before making your decision.
Protecting Yourself
There are many reputable debt management companies that you can interview when you are
searching for a new plan that will work for you. Before you decide on one please be sure to:
- avoid any company that charges high up front fees
- avoid any company that will not send you information
- avoid any company that asks you to begin making payments without reviewing your financial status
- avoid any company that asks you to begin making payments before your creditors have accepted your plan
- avoid a company that charges high monthly fees for their services
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Getting Started
If you're in debt and you've decided on a debt management program there are some things
that you must do to ensure that the plan works to your advantage. While some of these tips
might sound like common sense, too often they are overlooked once you are in a debt
management plan.
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On Time Payments
You must remember that the reason you decided on a debt management plan was because you
were falling behind on your payments. In order to pay down your debt in a timely manner
and begin building your credit
reputation you must make sure that all payments are made on time.
NO additional debt
Too often because a debt management plan allows you to lump all of your high interest
payments into one smaller monthly payment you will have extra money to spend. Unfortunately,
this can also result in your receiving offers for additional credit cards. Don't fall into
the trap of exchanging one set of credit cards for another. If you can't pay cash, don't purchase!
Verify payments are being made
While you're making payments on a debt management plan, you should carefully review all
of your monthly statements. Often, some less than perfect debt management counselors are
adding additional fees and charges on your monthly payments which may
result in you paying down your outstanding debts slower than you originally intended.
While there are many companies that offer you debt management plans you want to make
sure that you're payments are being made on time and that your debt is actually being paid down.
Don't fall into a trap and make sure to do your research.
Related topics: debt self help,
debt protection laws
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