Debt Management Plan (DMP) - Why, What, How
In recent years, the Federal Trade Commission (FTC) has taken
action to sue several "so-called" debt management organizations.
The FTC contends that these organizations deceived consumers,
charged high fees and didn't offer the services they claimed to
provide.
A reputable debt management credit counseling organization
should employ licensed and trained credit counselors, who
educate their customers on budgeting, saving money, debt
management and consumer credit.
A Debt Management Plan is a system, where consumers who are
overwhelmed by debt, seek the services of a debt management and
credit counseling service. The consumer deposits money into an
account, that is used by the DMP to pay off the consumer's
medical bills, student loans, credit cards, etc.
If you are currently enrolled in a debt management plan, the FTC
advises the following:
* Contact your creditors and let them know what you will be
paying your bills through a debt management plan.
* Check your monthly statements to ensure that your bills are
being paid on time.
* If you find that your bills are not being paid on time, call
your creditors and arrange a payment schedule, immediately. Pay
your bills on time.
If your Debt Management Plan organization goes out of business,
do the following:
* Contact your bank and stop payment on any money going to the
DMP.
* Contact your creditors and let them know that your DMP is out
of business and that you will be responsible for paying your
bills.
* Pay your bills directly to your creditors.
* Get a free copy of your government
credit report. Check for any negative information. If you
find any missed payments or late payments, contact your creditor
and see, if they will remove the information.