4 Tips for Hiring Better Debt Management

4 Tips for Hiring Better Debt Management

Individuals in debt who wish to use a debt management company should do their research before committing. There are many ways an unscrupulous debt management company can harm a debtor's interests. So, consider the following four points before hiring a debt management company:

1. Avoid calling or spamming you: Most debt management companies advertise in the Yellow Pages or on the Internet, but they are not too aggressive with customers. Any company that does this is likely not up to the task. Debt management companies that follow a direct calling policy or send unsolicited email generally fail to provide solid references. Most of these companies do not even have a reserve fund that acts as a guarantee to the debtor that his creditors will be paid.

2. Nonprofit Agencies Don't Necessarily Provide Better Service: First, not all nonprofit debt management companies offer their services for free. Some companies charge up to 15% of the debt amount. Being a nonprofit does not make a debt management company a better or more efficient service provider than those who charge for services. Companies that charge for their services must get their clients out of debt as efficiently as possible as they benefit from their work and their profitability is directly related to their credibility and reputation in the marketplace...

3. Never Call Off Your Credit Card Information: An honest, reputable debt management company will never phone you to ask for your credit card number or banking information. This is because they understand that callers can be spoofed. Additionally, the rise in online fraud is reason enough for indebted individuals to be more careful about advising debt management companies. Debt management companies that act in good faith will never ask any prospective or existing customer to share confidential information of any kind over the phone.

4. Do not believe someone who makes an offer too good to be true. It's likely like this: Debtors often come across debt management agreements that promise to cut their debt in half in no time. This rarely happens; However, the debtor pays high fees and a substantial amount upfront to the debt management company. These companies also discourage debtors from contacting their lenders. This is never a good idea and invariably hurts the debtor's credit rating. Ideally, if a debt relief firm promises to offer more than rate cuts and tips on getting out of debt and avoiding debt, debt should not be valued at face value.