Debt Management Programs
For some, debt management programs are needed. For others, getting out of debt requires a little tightening of the belt and nothing else. For others, debt can be like quicksand; slowly sinking deeper and deeper. If you find yourself in the latter category, consider working with a credit counseling agency to create a debt management program.
Here's how it works: you work with a credit counselor to create a budget you can live with. The counselor then contacts your creditors and attempts to negotiate better terms on your debt, such as lower interest rates or interest only payments for a specified period. For the most part, creditors are likely to accept to a reasonable offer, especially when it is made through a reputable credit counseling agency.
With the negotiated rates in place, the counselor will create the final debt management plan. This is the one you are to live by for as long as it takes to pay down the debt (usually 3-5 years). Once you sign the contract, you are responsible to pay the counseling agency the sum of your monthly debts plus their fee every month. Once they receive your payment, the agency pays the creditors directly. To ensure everything is on the up and up, ask your agency to provide monthly statements that record the progress of the plan and proof the creditors were paid on time.
If certain creditors don't accept your offer, contact them directly to make sure they were in fact contacted. Also, review the monthly statement your credit counselor supplies to make sure each bill was paid on time and that the negotiated rates were used in all instances. This usually takes a few minutes, and will get easier with each passing month.
A credit counseling agency can be a godsend for someone who needs step by step debt management programs. By taking a few proactive measures, you can ensure your agency is working on your behalf to the best of their abilities.
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