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Guide to Services Offered by Debt Management Companies

By Ruth Racey
Published: Wednesday, September 29th, 2010

The internet is filled with adverts for debt management help companies that claim to get you debt free within a few months. Many people who are in debt often wonder if these debt management help companies are any good and are they worth opting for. This article will elaborate about the various services offered by these companies so that you can make an educated decision.

Structured Repayment Plans

This is one of the most useful services offered by debt management companies. Structured repayment plan consists of the debt management company taking in all your dues from various creditors. You are then asked to pay a single fixed amount once a month to the debt help company so that you can clear your dues. You will be asked to sign a legal agreement that contains information about your payment plan and the fees you will be giving the debt help company. This service is beneficial to people who have too many creditors or to people who pay large interest rates to credit companies.

Counseling Services

Some debt management companies provide only counseling to people who want to clear their debts. These companies help people understand ways to get out of debt fast. Many debt counseling companies also refer customers to other third party debt management companies in case they want to opt for debt consolidation.

Depending on the situation you are in the counseling company may ask you to opt for personal bankruptcy and they will refer you to companies that will help you file for personal bankruptcy. It is important to remember that changing your social security number to get out of debt is illegal and by opting for this method you will most likely get into legal trouble. If any debt help company asks you to change your original social security number then you should report this company.

Resources for Debt Help

Many companies that provide counseling services also give out pamphlets, books and other materials that provide information on ways to get out of debt. While some companies do not charge for these materials, others provide these materials only after you opt for their services.

Help with Bill Collectors

After you sign up with a debt help company a representative from the company will call up your creditors and talk to them on your behalf. The debt help company you choose will handle legal and financial matters with all your creditors.

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