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Debt management - Consider these do’s and don’ts before taking out the option

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By: tiarajoseph11
on 21st Jul,2015

Whenever you become off guard, the debt can mount up without any proper intimation.
Debt management - Consider these do’s and don’ts before taking out the option


Whenever you become off guard, the debt can mount up without any proper intimation. However, there are several debt-management experts who can help you when debt becomes a burden to you. Unfortunately, now there are also several debt counselors who want to fleece you. If we consider the past decade, we will find more or less 259 cases against so-called debt-relief providers. The Federal Trade Commission (FTC) and state enforcement operatives have brought the data that those debt management companies have abused or deceived few unfortunate guys who are already drowning in debts.

So, there are few Do's and Don'ts you might have to consider on debt management which might be helpful to manage your debts easily.

Do's:

  1. Prepare to deal an attorney: Most creditors have hired representatives for managing their debt negotiations. But sometime it may be possible that you might have to encounter an attorney, who on behalf of the creditor can negotiate with you. But normally you have to pile a huge amount of debt to encounter of an attorney.
  2. Use money order system to payment your credit - While making payment to your creditor, you are actually revealing your financial details to him. The credit will get your bank details and other required information from the payment history. You might think what's wrong with that? But, there is something you are forgetting. If you are getting sued, it's very easy for the creditor to sneak at your funds through the details he got from the payment history. So, make sure to use a money order for making future payments.
  3. Ask for "Paid in Full" declaration: Make sure that your debt is listed in your credit report as paid in full. Check whether or not it is listed as "Fully paid" or "debt satisfied". Ask your creditor to make required changes if the debt is still showing unpaid status.
  4. Prepare a lawyer for your defense - If your negotiations doesn't work as expected, or if the other party (creditors) fails to keep their bargain, lawsuits can be filed. So, you must also have an attorney to present your side in the court.

Now it is time for you to know what you must avoid while looking for a debt management.

Don'ts:

  1. Don't select a for-profit debt-management agency - There are many companies which advise consumers regarding debt management. They might also offer budgeting tips to save a lot more by negotiating with the creditor about lower interest rates and monthly payments. Find one agency which is non-profitable and don't want to take more of your money. Ask your credit counselor if he is getting any commission to get you into this debt management program. If he does, look for a new one.
  2. Don't sign anything before verifying: Don't sign up the papers without reading it fully. There may be some special clauses included which might affect your finances later on. Hidden facts on theses legal documents may put you in more severe situations which can no longer be controlled by any authorized bodies. So, it is better to keep your eyes open and be calm.
  3. Don't reveal banking information over the phone - A call from your creditor or a collection agency will be very disturbing whether it's about a medical bill, credit card dues or a mortgage installments. If you are dealing directly with your creditor, you must not be pressurized by an agent. He has no rights for asking you to give banking details for an automatic payment.
  4. Don't make silly mistakes: Never, I mean never ever forget to make payments on time. Don't hesitate to make advances, but keep counting days to make every possible chance to pay on time. List up your payment dates, and schedule every payments accordingly.

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