Even when you already try to be careful about choosing a good credit counseling agency, if you enroll in a debt management plan a few problems may develop that can undermine the plan benefits.
The following tips can prevent the likely problems:
* After the counselor informs you about which of the unsecured creditors that have agreed to take part in a debt management plan, you need to contact them to check their participation before you give any money to your counselor. Even so, confirming before paying the counselor is not always possible. Occasionally, due to budget constraints, the nonprofit credit counseling agency is not able to contact the creditors to know if they will take part in the debt management plan unless you have paid. The agency needs to be certain that you are serious enough about paying the debts before it allocates time to negotiate the plan information with the creditors.
* If the counselor informs you that one of the creditors won’t agree to take part in the plan until you pay your counselor the first payment, call the creditor to verify that what your counselor says is entirely true.
* Be sure that the debt payment schedule the counselor makes, offers enough time for the creditors to get what they are owed before dates. If not, you risk racking up penalties and late fees.
* Every month, right after the date that the counselor makes your payment, verify with the counselor that your payment wasn’t late.
* If you receive your monthly statement of the account from one of your creditors that are participating in the debt management plan, inspect it carefully to be sure your account was appropriately credited. Also, be sure that all creditors made whatever concessions previously agreed, such as waiving certain fees, lowering the interest rate, or giving you the chance to make interest-only payments or reduced payments for a while.