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Friday, February 20, 2009

How to Make a Debt Management Plan Work for You

By Paul J. Easton

Do you have a debt management plan yet not sure how it will work to your favor? This article might be of help. As a guide to how a debt management plan will benefit you, these simple steps when followed closely will prevent you from falling further into debt. As a rule of a thumb, always prioritize to continue paying your bills until the plan has been approved by your creditors. If you just stop making payments out of sheer impatience or the lack of hope, you will get nowhere. And even before your creditors have accepted you into a plan, you will likely commit more late fees, charges, and the dreaded negative impact on your credit report.

Always confirm when you are notified that your creditors already approved your account with the debt management plan. Contact your creditors to further verify before sending payments to your credit counselor for the debt management plan.

Check the payments schedule with the debt management plan. Always ensure that the organization's payment schedule lets your debts be paid before they are due for the month. This will let you pay with certainty on a schedule thus avoiding the late fees and penalties. Verify by contacting your creditors on a certain date, like the first day of every month, just to confirm that your counseling agency has paid them on schedule.

As part of their education with you, you will be asked to review monthly statements from your creditors too. This is a way for you to monitor how effective your plan and if you are following them. This is also a way for the verification that your creditors have received your payments.

In addition, if the debt management plan depends on your creditors providing you with a lower interest rate and finance charges, check these concessions if they are also reflected on your statements. They better be reflected in your statements or they will not be followed.

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