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Things to Consider Before Signing Up with a Debt Management Program

April 8th, 2010

debt-management-programs.jpgDebt management programs are everywhere. In order to qualify for one, you must have a certain amount of unpaid debt. There are many things to consider when looking into debt consolidation or debt management to ensure that it is the right thing for you to do.

The upside to a debt management program is that if you have too much debt and not enough income to pay for it, you can consolidate all of your outstanding bills and liabilities into one low monthly payment while raising your credit score.

The first thing to keep in mind is that you cannot apply for a debt consolidation program until you have defaulted on a certain number of loans. If you can avoid going into default on a loan, it is better to do so rather than let it get to that point.

As with any service, meet with more than one debt consolidation program and compare services. Find out if signing up with the debt consolidation program will also help raise your credit score or if old debts will come off of your credit score immediately. In some cases, you sign up for the program and the bad debts are not removed from your credit score until the program has been completed. It is also important to find out what happens if you cannot make your monthly payment and for how long the program is expected to be maintained.

Make sure the debt consolidation program you are applying for is reliable. Check with the Better Business Bureau to make sure they don’t have any negative marks against them.

Once you have entered a program, let the debt management program handle any notices from collectors. If you continue to receive calls, find out who is calling you and give the information to the debt consolidation representative. Point the debt collectors in the direction of your representative, explaining to them that you are no longer handling the debt and that it is being handled by a third party.

The final thing to consider is that all debt collectors must agree to the program or it won’t work. You must also sign a contract which states that you accept the terms of the agreement.

This article was supplied by Beth Lytle from Constant Content.

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