Debt Management Plans Through Debt Relief Organizations–Do Consumers Benefit From Debt Management Assistance?

Some consumers who have had a difficult time in their financial life turn to debt repayment options through debt management plans. Usually, these plans work with a consumer’s creditor to make payment arrangements that allow a consumer to repay their debts at a more affordable rate through the use of a reduction in interest rates or term extensions, among other things. When a consumer uses a debt management agency they typically make one payment to this debt relief organization, which then uses the funds they receive to pay various creditors.

However, there are concerns by many when it comes to these types of assistance organizations as many consumers may fall into a trap or scam perpetrated by fraudulent companies. Obviously, many companies have asked for excessive fees up front and have done little to help the consumer or have not made any payments to creditors, which obviously has been detrimental to a consumer’s credit score and their personal finances.

While there are reputable debt relief organizations, consumers who are seeking out debt management plans through these agencies are strongly cautioned to research organizations which may help them with their credit counseling and debt repayment needs. Over the past months, many individuals have had a difficult time in their personal financial life due to a variety of reasons and have turned to numerous assistance agencies as a result. While many debt relief services may charge a fee, consumers are often advised to research a company’s past and present clientele, seek out ratings and customer testimonies with a particular company, and see if a particular agency has any sort of accreditation which will, obviously, cut down on agencies which may be fraudulent and only in business to drain funds from a consumer in financial trouble.

Also, many financial advisers and resources like the Better Business Bureau mention that reputable debt management companies can offer an overview of how they work, fees which will be levied against a consumer, and will provide a consumer with a breakdown of how their funds are being distributed to various creditors. Yet, there are some who feel that consumers should talk directly with creditors before even turning to a debt relief organization or nonprofit credit counseling agency, as a repayment schedule or debt relief opportunity may be worked out directly between a consumer and creditor.

Obviously, many debt relief companies make outrageous claims which draw and numerous consumers who are in a financially troubling situation, but these agencies are often to be avoided and, again, reputable companies must be sought out through research and even speaking with representatives of the particular debt relief organization. While again, consumers who have come to the conclusion that a debt relief service is in their best interest do have numerous companies and credit counseling agencies which can be helpful, a great deal of caution has been advised over the past months as more individuals who may be having trouble related to factors like unemployment are seeing scams and fraudulent businesses arise which may promise to relieve the financial burden many are facing, but in actuality are doing little to help consumers.