Picking The Right Debt Management Company

Debt Management Company Must Aid, Not Scam

Your debt woes are enough to put you in the throes of financial difficulty. Figuring in another financial boo-boo will not help. For this reason, it is important that when seeking for assistance in dealing with your debts, take pains to choose a legit debt management company. These companies ought to help you negotiate with creditors, work out an affordable payment plan and strategize on how to rein in or get you out of debt. They should not bury you deeper in a financial pit.

How To Choose A Legit Debt Management Company

So how do you choose the right debt management company? There are several considerations that you have to factor in. The following are some key items that may help you make the right pick.

Ask others who have been in the same situation for referrals. There is nothing like a debt management company that has been endorsed by someone you know because their actual experience with the company was great. Unless he has reason to do so, your friend or relative will not let you get involved with a company that delivered service badly. Ask about their good experience and how the process went to give you an idea of what to expect. Typically, legit companies will readily give you work samples that showcase work well done without compromising the client’s private details.

Choosing Between Profit and Nonprofit. Debt management companies come as for-profit or not-for-profit. One type is not a guarantee of legitimacy. There are non-profit firms that may scam you or may prove futile. At the same time, there are also plenty of for-profit companies that will just bilk you of your limited funds. A nonprofit debt management company may denote that it earned the government’s approval for special tax advantage. This may be a sign that the firm really intends to help debtors. However, this is not always an assurance.

Is the debt management company accredited? Because a nonprofit status does not always mean that the debt management company is legit, the next thing you should look at is accreditation. Although no national or local accreditation can ensure a favorable outcome, there are accrediting organizations that may help you whittle down the list of debt managers you are choosing from. These organizations aim to advance high standards and ethical practices in the field of consumer credit. Some of these accrediting bodies are the American Association of Debt Management Organizations, the National Foundation for Credit Counseling, and the Association of Independent Consumer Credit Counseling Agencies. Consider scratching out a debt management company that is not accredited by these or other accrediting bodies from your list.

Is the debt management company a member of the BBB? To investigate a debt management company further, you may check out the Better Business Bureau in your area. You may also check online if the company is a member of the online arm of BBB, www.bbbonline.org. Getting in touch with someone from the Attorney General’s office for any records showing that the company has been put through any regulatory action can also help verify the reliability of the company.

How much does the debt management company charge? A number of debt management firms will forgo initial sign up fees if you cannot afford them. Although these companies have increased fees due to the reduction of funding by lenders, avoid those that charge a hefty upfront payment to set up your account. Paying $50 monthly is a safe amount to start a management plan. Avoid debt managers who exact more than $100 to set up your account and deal with creditors.

Has your debt management company put the plan into writing? A legit company will allot time to analyze your case, give advice on money management and write you your own specific debt management plan.

When choosing a debt management company, be aware that there are scammers on the prowl; hence, it is imperative to ask for referrals, check for accreditation and BBB membership and make sure that its services start with a good written debt management plan.