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Tips for Success in Your Debt Management Program

It is a mistake to think a debt management program is “set it and forget it” solution. You have a lot of work to do too. What you are paying for in your contributions is the administrative fees required for the credit counseling agency to maintain your debt management plan. Plus, you can take advantage of the leverage the credit counseling agency has with the various credit card companies. But you still have your part in this to make it a success. Here are some tips to help your debt management become a success:

Make your payments on time. If you don’t make the payments on time, late fees can be assessed against you once more. When interviewing and shopping for a debt management program, you should also ask what they do if for some reason you cannot make a payment (such as an unforeseen job loss). It might be wise to save a few months of payments to buffer for that event should it happen.

Keep your debt management counselor informed as to any changes in your status. Your debt management counselor gets satisfaction from doing a good job helping his or her clients. But your counselor cannot keep creditors informed unless he or she knows what is going on with your financial affairs.

Don’t secretly get credit. The account you get will show up on your credit report and your creditors included in your debt management program will eventually find out. You want to avoid credit at this time because it is detrimental to the success of your debt management plan.

Look for ways to supplement your income to help with your debt management program. Depending on the debt management program, paying off a credit card or other unsecured account you have registered with it will not necessarily reduce your monthly payment. What will typically happen is whatever money is freed up will be diverted to the other accounts. There are ways to supplement your income if you are resourceful. It can be from selling old things in the garage to getting an extra part-time job.

Keep your debt management program involvement secret. It is really no one else’s business regarding your financial problems and your attempts to resolve them through a debt management program. But keeping your involvement confidential is more than just for your comfort. It is for your protection too. People in desperate situations are targets for scam artists. They know you are on the lookout for new opportunities to make more money. Under no circumstances should you give anyone money for the opportunity to make more money. Nor will your employer know that you are in a debt management program unless you tell him or her.

Use money orders to make your payments into the debt management plan if you can. Some might want you to schedule a monthly debit from your bank account but if you make your payments by money order it is best. The reason is because many who are going through these financially turbulent times tend to have unstable checking accounts. If an automatic debit is set up, the checking account is at risk of getting overdrawn if it is a bad month (we tend to forget about automatic debits). That means overdraft fees. Or, some banks will not even provide overdraft service if the account holder is having credit problems. Your debt management payments are high priority and making sure that they are covered by a money order keeps everyone at ease.

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