Tip 1 - Do not confuse Debt Management and Debt Settlement A Debt Management Program (DMP) and debt settlement are two completely different and distinct services.
- A DMP is geared to solving debt while maintaining personal credit rating. - Debt settlement is a process of negotiating payments for accounts payable for less than the original amount. - Debt settlement is never a good choice for consumer credit, the intention of maintaining their credit rating.
Consumers carry credit card balances with high interest rates to pay off the accounts in full, if they want to maintain a good credit score.
- The fastest way to pay off credit card debt at lower interest rates. - A legitimate DMP can achieve this. - A debt settlement companies do not.
Tip 2 - Be wary of companies or complicated evaluations Up Front Fees There is no reason for any company dealing with consumer debt require an upfront set-up fee.
There is no good reason for the company require new customers to provide their personal bank account numbers for a Service Agreement. Only very basic non-personal information is needed to determine whether a consumer can be helped by the program.
Consumers looking for the lowest possible monthly payment often victims of unscrupulous operations. They lowball the payment is required to lure distressed borrowers to sign up for their service. Once the unsuspecting customer logs in, they get a letter saying that their payment amount, because their creditors have changed their policy.
Tip 3 -. Debt management companies can not help a consumer with taxes, student loans and most of the savings banks are creditors who did not participate in debt management programs.
A DMP should be directed solely to eliminate consumer debt. Credit unions and student lenders usually offer better interest rates, prices that do not further reduced through a debt management program.
Tip 4 - Get clear, precise terms of payment Minimum payments are determined by each creditor and creditor requirements dictated their conditions. To determine each creditor minimum payment they require a percentage of the balance owed and they dictate the interest rate required. So in a DMP any creditor have a different payment and payout time.
A legitimate debt management company is in front of the consumer, provide the consumer with the details of each of their accounts a payment to the debt management company.
Companies that have detailed information about how a potential customer accounts would not be paid should be avoided. Are they daily, weekly paid, by mail, electronically?
Tip 5 - Beware of Financial Management company offers several services Debt management is a specialized service so detailed, expertise and intensive effort. Companies that provide services like debt negotiation, IRS help, offer credit repair, payday loans etc are often masters none of these services.
A company specializing in the handling of consumer debt can only be as fast as possible in search of a solution. There are no negotiations. Despite the advertising on television and the Internet, the reality is there is no one to one negotiations with creditors.
As already mentioned, the creditors dictate all the terms. There are no differences between the legitimate debt management companies. All are required to execute the terms of the creditors are displayed. So the interest rate and payout times the same between debt management company. I hope this information will help you make an informed decision....
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