Sometimes when people feel overwhelmed by their debt they turn to a professional organization such as a debt management company. Getting advice on how to better manage your finances from a professional is comforting to some people, and it is not a bad idea if you do not feel as though you can deal with your debt on your own. But before you entrust you financial well-being to a company that deals in debt management, it is a good idea to ask some questions up front.
Range of Services
According to the Federal Trade Commission, it is helpful to get involved with a debt management company that offers a variety of services that work with the concept of debt management. Try to find companies that offer financial adviser services, debt consolidation options and monthly budget counseling as well. A proactive company that reaches out to the community with debt consolidation seminars or debt management courses show that they understand the importance of educating the consumer and are not just interested in writing a plan to get their commission.
Certifications
It is up to you to do some homework before settling on a debt management company. Some states require that debt management companies be certified financial planners in order to do business. Find out if your state has that requirement by contacting the state attorney general's office, and ask prospective debt management companies if they are certified. There are other certifications that a proactive debt management professional can achieve, such as becoming a certified public accountant or registering with one of the national debt management bureaus, such as the American Association of Debt Management Organizations.
Membership in these organizations is not mandatory by law, but it does show that your debt management representative takes their job seriously enough to stay certified and remain current on the newest debt developments.
Bill Paying Process
According to the Wisdom Journal, which offers advice on financial services, it is important to find out the process a debt management company goes through before you sign an agreement with them. When you create a plan with a debt company, you would deposit your monthly payment in an account designated by the company, and then it would make your payments for you. Ask how long money is held before payments are made, and then get that holding period in writing. If the holding period seems too long then move on to a different debt organization. Making payments to a debt counselor does not help you if the counselor's policies cause late payments to your creditors.
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