The FTC and Debt Management Plans
63The FTC has determined that some debt management organizations have defrauded consumers. The FTC recommends that anyone using a debt management plan check their bills each month to make sure that the company is fulfilling all its promises. Anyone making payments through should contact all of the creditors to confirm that the plan has been accepted.
- Debt Management Companies that Can Help
If you are in deep financial debt, creating a workable plan to reduce debt is essential in order to eventually become debt-free. Once you determine that you are going to work on reducing debt and...
A creditor needs to accept the debt management plan before payments can be made. Not all creditors will accept the plan set forth by the debt management company. Once the creditors have accepted the plan, it is important to make regular, timely payments, as any missed payments can lead to all of your future payments being late, causing more financial hardship.
Be sure to read all monthly statements promptly to make sure all of the creditors are receiving payments according to your plan. It is essential that the organization is responsible if a scheduled payment is unable to be paid or if any creditor is not receiving payment. If any payments to your debt management plan or creditors are not been made prior to the due date, all of the progress made on paying down the debt could be lost.
Many states require that a debt management company obtain a license before offering any debt reduction services. Be sure to not establish a relationship with an organization that has not fulfilled the legal requirements necessary. Get an itemized price quote in writing before signing anything. It is essential that any debtor ask if all of the fees are covered in the quote.
The FTC provides these recommendations as a way for those experiencing financial stress to determine what to look for in a debt management company.
