Debt management plan – Things to remember
If you have unmanageable debts, you can take help of the credit counseling agencies which help you manage your insurmountable debts. These credit counseling agencies may also provide you with debt management program that can help you pay off your debts under a good plan. Sometimes these credit counseling agencies are non-profit and are instructed under the government to provide education apart from counseling.
Unfair practices by a counseling agency
In reality, these companies are supposed to give you counseling on budgeting and other plans to pay off your debts. But if you see that these companies are charging exorbitantly without anything in writing, you must complain the activities to the FTC (Federal Trade Commission). These companies may also urge you to make some “voluntary” contributions to their company that can make you fall into debts further. It may also make you bankrupt. There are certain companies that do not even go through your financial status and just offer you a debt management plan. This is actually not how a debt management program works.
Result of these unfair practices
If you see any company posing as a credit counseling agency and they follow no guidelines of one, you can complain against the company to the FTC. There have been many instances where a lot of these companies have been sued by the FTC. Apart from the FTC, a lot of Attorney Generals have even sued the companies. These companies have disclosed about their cost, nature and the work details. Many for-profit companies posed as non-profit ones and have really created a lot of problems regarding their fees structure. They have many times taken “voluntary” contributions from the customers and that have really created a lot of problems for a lot of debtors.
Things to do if you enroll in a debt management program
Once you enroll in a debt management program, you have to deposit certain sum of money every month with the company that in turn disburses the amount to the creditors. The creditors may agree to waive off certain late fees and also lower your interest rates. Jut try to make regular payments on your debts and once you do it, check with the creditors if they’re getting the money. Contact with the company if you feel that your money is not reaching the creditors on time.
Try to keep in mind that you must inform the FTC if you see any untoward activities from their end. You can also contact the attorney general for the same and keep every proof with you.