Private Debt Management
Many of the less reputable debt management firms attempt to hide redundant charges within the monthly payments, and some of them add on an additional annual expense for exactly the same efforts! Not to repeat ourselves, but this is why a close perusal of the final good faith estimate is such an integral part of choosing the debt management companies. If it’s not within your capacity or if you haven’t the time (since so many borrowers who need to consider debt management are holding down two jobs), ask any of your friends or family who may be more experienced with financial matters or who have an accountant upon retainer if they could take a look to weed out such unnecessary fees. Sometimes a creditor will even insist upon proof of payment to the debt management firm in question before they undertake serious negotiations, but, as with everything, this should be verified beyond possible dispute.
While on the subject of monthly payments, another element of debt management that many borrowers unused to dealing with this sort of financing tend to ignore revolves around the lenders themselves. Remember, you are entrusting all payments to be made – which, in essence, means entrusting your credit rating for years to come – to the debt management firm, and it’s of the greatest importance that they understand and acknowledge their responsibility. Particularly lax or incompetent debt management companies (or, even, those companies that themselves have liquidity problems) have been known to delay the payments to creditors that they have been charged to transfer out.
After debt management, you will be sending the checks to the management company, but, in many instances, you will still be held liable by the credit card companies for the obligations that you originally signed on for. Make sure that you understand precisely your debt management partners’ plans for timely remuneration of the credit card companies and – we apologize for the repetition but this cannot be underlined sufficiently; too many households have been lost to oral agreements – get everything down on paper. For that matter, force the debt management company to send along a notice each month that records their payments to the various lenders alongside some tracking system available over the internet. As ever, should the debt management professional suddenly blanch or in any way act as if this is outside the bounds of his responsibility to his client, feel more than free to walk out the door. Indeed, feel that it is your duty to remind the company about industry standards.