5 Tips To Create A Smart Debt Management Plan

When you enroll with a Debt Management Plan, your credit card debt and other unsecured debt are consolidated into one monthly payment

. A DMP negotiates with your creditors to reduce or freeze your interest rates, waive late fees, and make your monthly payments within your budget allowing you to repay debts quicker than you would otherwise have been able to. To get the best out of your DMP, you have to be committed to the entire process faithfully. Here are 5 tips to help you get the best out of your debt management plan.

1. Choose the right DMP for you

Be careful in making your choice of a DMP. There are lots of debt management agencies and quite number are into credit scams. Check with the better business bureau in your state to ensure the DMP is accredited and there are no complaints lodged against the agency. Go for free credit counseling to get professional advice on the best strategy to use for your debt management plan. When you have decided on a reputable Debt, management agency, ask a lot of question to be sure of what you are getting into.

2. Get everything in writing

Do not make any verbal agreements with the DMP agents. Let the DMP contract be clearly spelt out and dully signed especially the monthly payments, fees and the duration of the DMP. Agree to only monthly payments that you can meet up with. Defaulting on payments can ruin the whole process. Check the fine print very carefully.

3. Call and confirm your creditors approval of the program

Withouit your creditors approval of the debt management plan, the plan cannot work. Therefore make sure everyone of your creditors have signed to the program before you start making payments to the agency.

4. Do not default

As already mentioned above, the debt management program depends on your making a single regular monthly payment to your DMP who now pays your creditors accordingly. Most creditors use the first 3-4 months to test whether you will be consistent with your payments. If you default, they may opt out of the program. Do your best to pay regularly

and on time. If you are going to be late, call your DMP to inform your creditors.

5. Follow up and keep checking

Call your creditors every month to check that payments have been made to them. Ask for monthly statements from your DMP and cross-check every payment. Check your credit card and loan statements to make sure they reflect the terms of the DMP agreement. Make sure everything stated in the contract is being done. Keep copies of every document in case any dispute arises.

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Debt Information Center the internet's No.1 center for free information on debt management and consolidation.

by: Titus Hardin

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