Creating A Debt Management Plan

Everyone has debt, no doubt about it. Think about all the credit cards, loans, utilities, and medical bills we incur every month or year. We all have debt, which means we should all have a debt management plan. You can create your own plan or obtain the help and guidance from a reputable company or organization, the choice is yours. However, you should make your decision on which debt management company you should choose based on the services they offer and the fees they charge.
You will find some companies are not for profit and do not charge anything for their services. However, other charge extensive fees, and in some cases, they are hidden and you never know it until you find you are being forced to pay it. Some are extremely sneaky and ask you for contributions on a voluntary basis, which could lead to further debt. So be extremely careful with the company you choose and check them out extensively, the FTC (Federal Trade Commission) could be of great help, as well as the BBB (Better Business Bureau), you also want to look for licensed companies.
Now when you have established a debt management plan, what will generally happen is one of two things. You will either establish your own savings specifically for deposits on your plan or you will make these deposits to the company you have chosen to help you reduce your debt. Either way, these deposits should be for nothing more than that debt. A company might be a better choice, because they can generally rework the debt you owe and negotiate lower rates of interest and sometimes eliminate penalties or late fees.
There are some things you need to do if you are using a company. The first thing to do is make sure you are following your debt management plan right regularly. This means you want to make all your payments on time, every time. This is the best way to manage your debt, make sure you are keeping up with all payments. You should have no problems in making the payments, because the company will help you establish a viable budget, in which these payments will be included.
Furthermore, each month your creditors will send you a statement, as well as one to the company you are working with on your debt management plan. Look these statements over very carefully. You want to be sure that your payments are being made and credited according to the plan that you and the company developed.
If ever you find you cannot make a payment on time or you find that the company is not following your debt management plan, you should contact them right away. If you find the company is not working to your satisfaction, immediately stop working with them, contact your creditors, and stop any direct payments from your bank to the company.

by: Michael Louis
Michael Louis is always looking for ways to save and manage money. Did you find these tips useful? You can learn more tips on debt management at 123reducedebt.com.