To ensure that your debt management plan helps you get out of debt, you must take an active role in overseeing it. Even when working with a reputable credit counseling agency, problems can develop if you participate in a debt management plan. Follow these tips to minimize the potential for problems:
After your counselor tells you which of your unsecured creditors have agreed to participate in your debt management plan, contact them to confirm their participation before you send the counselor any money.
Taking this step before paying any money may not always be possible. Due to cost constraints, a nonprofit credit counseling agency may not contact your creditors to find out if they will participate in your debt management plan until you have given the agency an initial month’s payment on the plan. The agency wants to be sure that you are serious about paying your debts before it spends time negotiating the plan details with your creditors.
If your counselor tells you that one of your creditors won’t agree to participate in your plan until you send the counselor an upfront payment, contact the creditor to confirm that what the counselor says is true.
Make sure that the schedule your counselor sets up for paying your debts provides enough time for your creditors to receive what they are owed each month before the payment due dates. Otherwise, you risk racking up late fees and penalties.
Every month, just after the date that your counselor is due to make a payment, confirm with the counselor that the payment was made on time.
Whenever you receive a monthly statement of your account from one of the creditors participating in your debt management plan, review it carefully to make sure your account was credited correctly.
Make sure that each creditor made any concessions it agreed to make, such as lowering your interest rate, waiving certain fees, or allowing you to make reduced payments or interest-only payments for a while.
