Debt management plans are necessary if you want to manage your debt so that you get out of it sooner rather than later. But it can be difficult due to having been given the wrong information by unscrupulous companies who create these plans with the main intention of ensuring that they make as much money from those in debt as they legally can.

Debt Management Plans –
FTC Recommendations

A recent report claimed that due to the fact that many people are facing financial disaster, fraudulent debt companies who promise to clean credit reports of unwanted information are growing and in need of eradicating.

In 2008, the Federal Trade Commission noted a 50 percent increase in complaints about this.

In fact, they have  determined that some debt management companies have defrauded consumers.

The FTC recommends that anyone using a debt management plan should check their bills each month to ensure that the company is fulfilling all its promises. Anyone making payments through, should contact all of the creditors to confirm that the plan has been accepted.

As a whole, creditors needs to accept the debt management plans put before them before debt payments can be made. Not all creditors will accept the plan set forth by the debt management company.

Once the creditors have accepted the plan, it is important to make regular, timely payments, as any missed payments can lead to all of your future payments being late, causing more financial hardship.

Guidelines for Debt Management Plans

Be sure to read all monthly statements promptly to make sure all of the creditors are receiving payments according to your schedule.

It is essential that the organization is responsive if a scheduled payment is unable to be paid or if any creditor is not receiving payment.

If any payments on your debt management plan to your creditors are not been made prior to the due date, all of the progress made on paying down the debt could very well be lost.

Many states require that a debt management company obtain a license before offering the service which incorporates help with debt management plans. Be sure not to establish a relationship with an organization that has not fulfilled the legal requirements necessary. Get an itemized price quote in writing before signing anything. It is essential that a debtor ask if all of the fees are covered in the quote.

Debt Management Plans – Conclusion

The FTC provides these recommendations as a way for those experiencing financial stress to determine what to look for when getting advice on completing debt management plans.