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How to Choose the Right Debt Management Program

By Ruth Racey
Published: Thursday, December 5th, 2013

A realistic and comprehensive debt management program helps; however, it is important to do in-depth research and consider different choices available to have the most effective plan. In a scenario where you find yourself immersed in debt, with your finances taking the worse turn, a debt management program comes to rescue. The right kind of debt management program can help you negotiate with your creditors for low rate of interest, consolidate the monthly payments into one, get the late fees waived off, and work out a debt repayment schedule that is acceptable to you and the creditors. Undoubtedly, such a plan will help you keep your head above water even in worse situations.

Discussed here are the steps to find the right debt management program for you:

Do-it-Yourself

You may not realize the fact but even you can do most things that debt management agencies do, and that too by saving almost half of your money in fees. The simple agenda is to make a realistic budget, cut down unnecessary expenses, prioritize the debts on the basis of repayment schedule and importance, and contact the creditors to waive off late fees, reduce rate of interests, and work with you to create a payment schedule. Often, creditors will be happy to work with you if you demonstrate a good effort to repay them. On the other hand, hiring a credit counseling agency may also negatively affect the credit score.

Get a Good Credit Counsellor

However, debt management may sound easier than it is. Therefore, it is important to have a good credit counselor who can help you make a realistic budget and explore different options available to get rid of the deep dungeons of credit. A credit counselor won’t just push you into any debt management program, but take you through different choices available to help you create the right plan. Hence, before you enroll for a debt management program, it is important to get a good credit counselor and research thoroughly to have the best value of money.

Research well about the Agency

If you choose to hire a credit counseling agency, it is important to research well about the same. Look only for an accredited and non-profit agency that is licensed in your state. At the same time, stay away from agencies that charge extreme upfront fees. Once you have discussed your current financial situation with them, find out how the payments will be disbursed to the creditors and whether your personal information will be well-protected.

Choose a Plan that fits your Needs

Finally, only choose a plan that fits your requirements and promises to reduce your debt burden. Make sure that you have everything in writing.

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