Best Debt Management Companies – Advice On How To Find The Top Debt Companies

Written by admin on December 7th, 2010

Finding the best debt management companies can seem like finding a needle in a haystack if you are not sure how to go about it.  There are hundreds of companies offering to solve all your problems and promising amazing results, but how do you know whether or not you can trust them?  You are right to be sceptical as there are many companies out there that you would do well to avoid.  Some unscrupulous organisations view desperate people as a business opportunity, and a bad debt management plan will leave you worse off, rather than better, in the long run.

So what do you need to know to make sure you can avoid the money-grabbers and find the most reputable and best debt management companies?  The best place to start is with a good understanding of what debt management is, so that you know what to expect from the companies you approach and what questions to ask them.

There is a lot of different terminology around this subject, so I will clarify that to begin with.  Debt management companies offer Debt Management Plans.  These are also known as debt payment plans or programs.  The process is also sometimes known as debt consolidation in the US, whereas in the UK debt consolidation always means taking out a loan to pay off your debts.  The term consolidation is used because the process does include consolidating all your debts into one single payment.  Debt management does not, however, involve any new loans or borrowing of any sort.

The process of setting up a plan for you will involve an experienced debt advisor going through your finances with you and then negotiating on behalf of you with all of your creditors.  The purpose of the negotiations is to arrange new repayment terms which will bring your payments down to a level that you can afford.  This will usually include having interest charges reduced or frozen, so your debt stops growing.  You then just make one monthly payment to the management company and they pay your creditors for you.

The main advantages of these plans are having only one payment that you can actually afford to make and not having to deal with creditors chasing you for payments, because the debt management company will deal with all of that.  You need to be aware that debt plans are only for unsecured debts, so you cannot include any secured borrowing like your mortgage.  The other things that the debt management companies will look for is that you have a steady income which leaves you enough money spare to make the monthly payments, and that you have a substantial amount of debt.

If you do not think you will have enough money left over after paying your basic living expenses to meet the payments on a plan, then you may need to consider debt settlement instead (or an IVA if you are in the UK).  These are for more serious debts and involve negotiating to write off a substantial part of what you owe.

Once you have a good understanding of the process involved, you then need to look for well established and reputable companies who operate in your country of residence.  The dangerous ones are often the new organisations with no track record, so look for companies that can demonstrate having put into practice what they say they can do.  The safest way to find the best debt management companies is to follow recommendations, and you should always apply to at least two so that you can compare what they offer you.  This will also give you an opportunity to consider which company you feel more comfortable dealing with.

Tags: , , , , , ,

Leave a Reply