If the three parties work together responsibly, the program should eliminate all debts within 3-to-5 years.Most debt management companies require you to close credit card accounts since those are usually the cause of debt.Beware of hidden fees, scams and fraudulent organizations.
They are your liaison with creditors and can smooth out any issues you have.
If you suddenly run into an unexpected amount of money, you can pay off your balance early with no penalty.
Those who enroll make monthly deposits with a credit counseling organization, which then is used to pay the debts according to a predetermined payment schedule developed by the counselor and creditors. Before you sign up for a debt management plan, choose a credit counseling organization to help you with the process.
Your monthly payment is tailored to what the customer can afford, and you know before agreeing to take part in the program what that monthly amount is. Many of these organizations are nonprofit and may offer counseling sessions free of charge, while others charge fees.
Participating in a debt management plan will cost you very little.
After counseling sessions, you should only pay a small one-time set-up fee and a small monthly maintenance fee.
Have all that information available when you call the company.
If you have any questions about the terms or conditions, call the credit counseling agency in charge of the agreement.
Once you find a credit counselor with whom you’re comfortable, he or she will review your finances and help you create a budget, as well as help you decide whether a debt management plan is right for you.