How to Choose a Debt Management Company (cont.)
Contributed by Melanie Vannuys
If you're going to use a debt management company, then you're going to want to know, first off, that they are affiliated with the National Foundation of Credit Counseling. Next, make sure that their terms are completely understandable. This is YOUR money we're talking about, so don't be afraid to ask questions and then ask more questions. Make sure you understand their payment terms. A reputable company will have easy-to-understand payment arrangements and will be happy to share them with you. Anyone who offers less, isn't worth your time.
Is A Credit Card Company Willing To Work With A Debt Management Company?
Are you ready for this? Many credit card companies ARE debt management companies! Ironic, right? Oh, they don't advertise this and it really isn't common knowledge in the debt management world, but it's the truth. They disguise themselves as "collection departments" and offer you lower interest rates, lower payments or they negotiate a pay off amount to clear the debt.
What they don't tell you is that it will still reflect negatively on your credit report as a negotiated pay off amount and it really doesn't help you. To be fair, though, the lower pay off amount will get you out of debt quicker and prevent bankruptcy. But the question here is, do you really want to trust the company that helped get you into to debt, to help get you out?
