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Home  Tools and Checklists Checklists Checklist for Those on Debt Management Plan
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Checklist for Those on Debt Management Plan
ARTICLE RATING  The Federal Trade Commission (FTC) warns the public against such credit counseling agencies that claim to be non-profit but asks for unreasonable payment from their clients who are already swamped in debt. Some of these fake credit counseling agencies use deceptive tactics on customers who do not have any idea that they’re dealing with the wrong credit counseling agency. What is a Debt Management Plan ? For instance, some credit counselors may advice consumers to enroll into a debt management plan. With a Debt Management Plan , the consumer will be submitting a monthly payment to the credit counseling agency. The agency in turn, will divide the payment and distribute it to different creditors. It is true that creditors can give lower interest rates and even waive penalties for those who are paying through a debt management plan. Where does your money go to? The big question is: Is your credit counseling agency submitting your money to your creditors faithfully? Some fraudulent organizations have been proven to use consumers’ money on illegal purposes. Thus, before making any payment to your credit counseling organization, make sure that your creditors have agreed to accept your payment using a debt management agency. Also, it is crucial that you examine your monthly statement of accounts regularly so that you can be sure that your creditors are indeed receiving your payments promptly. Timely Payments Another important thing to consider is that you must submit your payments to the agency on time. In case you won’t be able to make it on the scheduled payment, inform your credit counseling agency right away. Keep in mind that creditors have given you privileges of waived fees and lower rates because you are enrolled in a What if the credit counseling agency that handles your debts goes out of business? Here are some actions that you must do without delay: • If you’re paying automatically through your account, call your bank immediately and stop the payments. • Inform your creditors that the credit counseling agency who manages your debts has shut down. Request if your creditors can still continue to give you lower rates even without a debt management plan. • Submit your payments directly to your creditors. • Check your credit report. Examine carefully if there was any late or missing payment while you were on the Debt Management Plan . If the delays in payments were due to the fact that your credit counseling agency is going out of business, call your creditors and inform them.  |
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