Digital News Report – A debt management plan is an arrangement is when you have an organization arrange a repayment plan for unsecured debts such as credit cards, medical bills, and student loans. You usually pay the debt management program each month a specified amount, and they will then the organization will pay each outstanding bill. A benefit to participating in a debt management plan is that credit card companies can sometimes agree to a lower interest rate, lower monthly payment amount, or now more extra monthly penalties. If you do fail to make the agreed upon payments you can lose the discounts that the credit card company has agreed to and you may have a very difficult time getting another agreement at all from them again.
A lot of time, a debt management plan can be recommended by a credit counseling service. The FTC recommends that you carefully select your credit counselor before signing up with them. Also the federal government has an certified list of credit counselors that have met the standards set forth by them. You can also check with the Better Business Bureau to see if there are any complaints about any specific credit counseling company.
You should also make sure that you bills are being paid each month on time. Even though a debt management plan makes handling your financial problem easier, you are ultimately responsible for your bills being paid. By double checking to make sure of any payment problems in advance you can avoid problems later on down the road.
By: Victoria Brown