Debt Management Program Information that Can Help Improve Your Financial Situation

A credit counseling organization may recommend you enroll in a debt management program if too much debt is causing your financial problems.

A debt management program requires you to provide the credit counseling organization with regular monthly payments and they, in turn, will make monthly payments on your unsecured debt.

Costs associated with these types of programs often are buried in your monthly payments to the credit counseling organization and can be much higher than you'd expect. Incidents of the credit counsellor failing to make payments do occur. Remember, in that situation, it's your credit rating that gets hurt.

These programs can take up to 48 months to complete depending on the size of your debt and how much your budget allows you to contribute each month. They require you to make regular, on-time monthly payments.

Part of the program may involve restricting you from using credit cards or incurring any further debt while you are still in the program and paying off your current debt.

Debt management programs are not for everyone. You should only consider one after extensive review of your financial situation warrants such a move. And then you should only consider it after a credit counsellor has offered you advice on how to manage your money.

Beware of credit counseling firms that require you to sign up for their programs before they evaluate your financial situation.

Even if you decide a program is not for you, reputable credit counseling organizations should still help you put together a sound budget and financial plan.

The credit counseling industry, debt management, debt negotiation, debt settlement programs are full of organizations that are less than reputable. They prey on people's desparation at a time when they can ill-afford to lose any more money or time.

The key is to take the time to find a reputable organization and make sure they are not rushing you into some sort of program that will cost you more money than you bargained for.

According to the Federal Trade Commission, you can protect yourself by being wary of credit counseling organizations that:

• charge high up-front or monthly fees for enrolling in credit counseling or debt management program
• pressure you to make "voluntary contributions", another name for fees
• won't send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers, and balances
• try to enroll you in a program without spending the time reviewing your financial situation
• offer to enroll you in a debt management program without teaching you budgeting and money management skills
• demand that you make payments into a debt management program before your creditors have accepted you into the program

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Credit Card Debt	$ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+
Other Unsecured Debt	$ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+
Number of Creditors	Select One 2 3 4+
Status of Bill Payments	Select One Up to Date About to Fall Behind 1 Month Behind 2 or More Months Behind
I want to	Select One Eliminate My Debt Consolidate My Debt Seek Advice
Own a Home?	Yes  No