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Savings and
debt management classes along with budget counseling are minimal
services that any debt management organization should offer when
considering an organization for assistance. Developing a
personalized money management plan and discussing your complete
financial situation is key when having a one-on-one consultation
with a debt counselor. If an organization is suggesting, as your
only option, a debt management plan before your entire financial
situation is analyzed, you should seek help elsewhere. DMP's are not
for everyone. Once your financial situation has been thoroughly
analyzed by a certified credit counselor and you've been offered
customized advice on managing your money, only then should you enter
into a DMP, if in fact that is what your counselor is recommending.
Ask any credit counselor that you are considering what they can do
to help you retain the benefits of your DMP if you were on a DMP
with an organization that has closed down.
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Financial
organizations that offer debt management plans, credit counseling
and similar services are required to be registered or licensed in
most states. If an organization has not fulfilled the requirements
of your state, do not use them.
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Reputable
organizations will not charge a fee for providing information about
the nature of the services that they offer .Avoid
organizations that do.
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If you do
agree to participate in a DMP over the phone, do so only after you
have received all verbal promises in writing and that you have had a
chance to carefully review all documents before signing them. If you
are being pressured to act immediately, consider finding a different
organization.
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Make sure the
debt counselors working for the organization that you are
considering have been trained by an outside organization not
affiliated with creditors. They will offer the best, unbiased
advice.
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Your state
Attorney General, local consumer protection agency and the Better
Business Bureau are all agencies that you should consult when
identifying credit counseling organizations that will best suit your
needs. These agencies can tell you if consumer complaints have been
filed against the organizations, that could alert you to problems.
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Be sure to
get a detailed price quote that includes all fees in writing. Some
organizations will reduce or waive fees if a consumer cannot pay.
Look elsewhere for help if an organization won't help you because
you can't afford to pay.
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Some credit
counselors are commissioned for certain services that they may try
to sign you up for. The credit counseling organization itself may
also receive additional compensation from creditors if you become
enrolled in a DMP. In order to make sure that you are not being
steered into a plan that you don't need, that is merely for the
benefit of the credit counselor, ask the organization that you are
considering how it's counselors are compensated. If they are not
willing to share this information with you, consider going
elsewhere.
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Make sure the
organization has safeguards in place to protect the privacy of your
sensitive financial information.
