Checklist for Those on Debt Management Plan

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When confronted with serious debt, people often run to credit counseling agencies for help.  True, you can find reputable non-profit organizations or credit counseling services who offer genuine debt relief.  However, Federal Trade Commission (FTC) warns consumers against fake credit counseling agencies who may take advantage of your bad debt situation.

Take note that being a “non-profit” credit counseling organization does not guarantee that it is legitimate.  Some groups may claim to be non-profit yet may charge unreasonable fees and hidden costs for their services.  If you’re not aware of deceptive tactics that fake agencies use, you could be in trouble.  For example, a false agency may force a client to enroll in a DMP or Debt Management Plan.  Although, enrolling in a DMP is not bad, you need to make sure that you’re dealing with a trusted credit counseling service.

What is a Debt Management Plan?

Under a Debt Management Program, you would be submitting monthly payments to the agency.  In turn, your agency would be the one to distribute your payments to the corresponding creditors.  This is usually done after a credit counseling agency has negotiated with your creditors. 

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Debt Consolidation Information