Given the huge numbers of debt-ridden consumers lately, it's not surprising consumer credit counseling services (CCCS) have become very popular, consequently the demand for information about debt management Plans (DMP) is ever growing.
Unfortunately, not all of these companies have your best interest in mind, to say the least.
This article will aim to enumerate the things to avoid when dealing with a CCCS.
A debt management plan, also known as debt consolidation program, is one of the options offered by credit counseling agencies and it's also an agreement, between you and the agency, in which you allow them to be the intermediaries between you and your creditors.
You also agree to make one monthly payment to the counseling service so they can distribute the payments to your creditors.
Since some agencies are only looking to make profit and don't really care about helping the consumer, you should avoid any agency that:
Furthermore, do not let a non-profit status stop you from thoroughly investigating the agency.
It is important to note that quite a few CCCS, including "non-profits" and attorneys, have been under fire lately by consumer groups, the Internal Revenue Service, the Federal Trade Commission and the Better Business Bureau for complaints ranging from charging excessive fees to failure to distribute payments to creditors and aggressively selling not needed DMPs to consumers.
In spite of these rotten apples, there are still a handful of companies that are focused on truly helping and educating the consumer and if you still want to know more about debt management plans you need to do your due diligence in researching these agencies with the help of the guidelines outlined above.
Alternatively, you can always do your own DMP by calling your creditors to negotiate lower interest rates.
Although this is easier said than done, with a good debt reduction system, some discipline and determination you can surely accomplish it.
Regardless of what you decide to do about getting out of debt, you do need to follow a system and you can look for a good system in the net, which you can implement for free depending of the seriousness of your debt.
You can also purchase a do it yourself debt reduction system for a very small fraction of what you'd pay the counseling agency.
Unfortunately, not all of these companies have your best interest in mind, to say the least.
This article will aim to enumerate the things to avoid when dealing with a CCCS.
A debt management plan, also known as debt consolidation program, is one of the options offered by credit counseling agencies and it's also an agreement, between you and the agency, in which you allow them to be the intermediaries between you and your creditors.
You also agree to make one monthly payment to the counseling service so they can distribute the payments to your creditors.
Since some agencies are only looking to make profit and don't really care about helping the consumer, you should avoid any agency that:
- Seems focused on talking about debt management plans rather than providing you with a full budget analysis and counseling.
A CCCS should emphasize counseling as a priority. - Does not offer you a private session to fully analyze your financial status before making a recommendation.
- Charges high fees--the set up fee should be between $45-$50 and the monthly fee $25.
- Charges upfront fees
- Aggressively markets through telemarketing, mail or tv ads.
- Does not include all your unsecured debt creditors in your DMP.
- Does not provide you with a clearly written agreement including all fees and details.
- Provides its employees with commissions or bonuses for selling DMPs.
Furthermore, do not let a non-profit status stop you from thoroughly investigating the agency.
It is important to note that quite a few CCCS, including "non-profits" and attorneys, have been under fire lately by consumer groups, the Internal Revenue Service, the Federal Trade Commission and the Better Business Bureau for complaints ranging from charging excessive fees to failure to distribute payments to creditors and aggressively selling not needed DMPs to consumers.
In spite of these rotten apples, there are still a handful of companies that are focused on truly helping and educating the consumer and if you still want to know more about debt management plans you need to do your due diligence in researching these agencies with the help of the guidelines outlined above.
Alternatively, you can always do your own DMP by calling your creditors to negotiate lower interest rates.
Although this is easier said than done, with a good debt reduction system, some discipline and determination you can surely accomplish it.
Regardless of what you decide to do about getting out of debt, you do need to follow a system and you can look for a good system in the net, which you can implement for free depending of the seriousness of your debt.
You can also purchase a do it yourself debt reduction system for a very small fraction of what you'd pay the counseling agency.